annual report 2017-18madhusudan-india.com/pdf/ar/madhusudanannualreport2017-18.pdf · 1 madhusudan...

ANNUAL REPORT2017-18

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Annual Report 2017-2018

Contents Page No.

Notice 1

Directors' Report 5

Corporate Governance Report 16

Secretarial Audit Report 21

Independent Auditors' Report 23

Balance Sheet 26

Statement of Profit & Loss 27

Cash Flow Statement 29

Notes to Financial Statements 30

Annual General Meeting at 11.30 a.m. on Tuesday,the 25th day of September, 2018 at the Registered Office.

Board of DirectorsShri Rajesh B. ShahShri Sanwarmal AgarwalShri P. K. ShashidharanShri P. C. SuranaSmt. Rutva Acharya

AuditorsShailesh Shah & AssociatesChartered Accountants,2, Nilima Park, Next to Rasranjan, Near Vijay Cross Road,University Road, Ahmedabad - 380 009.

Registered OfficeSurvey No. 359/B, 359/C, 361 and 362,Rakhial - 382 315, Taluka - Dehgam,Dist. Gandhinagar, Gujarat.Phone : (02716) 267270E-mail : [email protected] : www.madhusudan-india.comCIN : L29199GJ1945PLC000443

Ahmedabad Office"Madhusudan House", Opp. Navrangpura Telephone Exchange, Ahmedabad - 380 006.

Registrar & Share Transfer AgentMCS Share Transfer Agent Limited,201, Shatdal Complex, 2nd Floor,Opp. Bata Show Room, Ashram Road,Ahmedabad - 380 009.

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MadhusudanIndustries Limited

NOTICE is hereby given that the 72nd Annual General Meeting of the Members of MADHUSUDAN INDUSTRIES LIMITED will be held at 11.30a.m. on Tuesday, the 25th day of September, 2018 at the Registered Office of the Company at Survey No. 359/B, 359/C, 361 and 362, Rakhial– 382315, Taluka Dehgam, District Gandhinagar to transact the following business :

ORDINARY BUSINESS

1. To receive, consider and adopt the financial statements of the Company for the year ended 31st March, 2018 including statement of AuditedProfit and Loss for the year ended 31st March, 2018 and Balance Sheet as at that date and the Directors’ and Auditors’ Reports thereon.

2. To appoint a director in place of Shri Sanwarmal Agarwal (DIN 0607627), who retires by rotation and being eligible, offers himself for re-appointment.

SPECIAL BUSINESS

3. To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special resolution:

“RESOLVED THAT pursuant to Section 149,150,152 and any other applicable provisions of the Companies Act, 2013 (“the Act”) and therules made there under including any amendment(s), modification(s), replacement(s) or re-enactment thereof for the time being in forceread with Schedule IV to the Companies Act, 2013, Shri Rajesh B. Shah (DIN 0607602), Independent Director of the Company, whose termof office as Independent Director expires on 31st March, 2019, and in respect of whom the company has received a notice in writing froma member proposing his candidature for the office of Independent Director be and is hereby re-appointed as an Independent Director ofthe Company (who will not retire by rotation) to hold office, for a second term of 5 (five) consecutive years upto 31.03.2024.”


“RESOLVED THAT pursuant to Section 149,150,152 and any other applicable provisions of the Companies Act, 2013 (“the Act”) and therules made there under including any amendment(s), modification(s), replacement(s) or re-enactment thereof for the time being in forceread with Schedule IV to the Companies Act, 2013, Shri Prem Chand Surana (DIN 06508125), Independent Director of the Company,whose term of office as Independent Director expires on 31st March, 2019, and in respect of whom the company has received a notice inwriting from a member proposing his candidature for the office of Independent Director be and is hereby re-appointed as an IndependentDirector of the Company (who will not retire by rotation) to hold office, for a second term of 5 (five) consecutive years upto 31.03.2024.”


“RESOLVED THAT pursuant to Section 149,150,152 and any other applicable provisions of the Companies Act, 2013 (“the Act”) and therules made there under including any amendment(s), modification(s), replacement(s) or re-enactment thereof for the time being in forceread with Schedule IV to the Companies Act, 2013, Smt. Rutva Acharya (DIN 06933478), Independent Director of the Company, whoseterm of office as Independent Director expires on 31st March, 2019, and in respect of whom the company has received a notice in writingfrom a member proposing her candidature for the office of Independent Director be and is hereby re-appointed as an Independent Directorof the Company (who will not retire by rotation) to hold office, for a second term of 5 (five) consecutive years upto 31.03.2024.”

Regd. Office : By Order of the Board of DirectorsSurvey No. 359/B, 359/C, 361 and 362,Rakhial – 382 315, Taluka - Dehgam, Dist. Gandhinagar. Dipshika Khatri28th May, 2018 Company SecretaryCIN : L29199GJ1945PLC000443

N O T E S

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. A person can act as proxy on behalf of members notexceeding fifty (50) and holding in aggregate not more than ten percent of total share capital of the company.

2. Members are requested to notify immediately the change of address, if any, to the Company or MCS Share Transfer Agent Limited,Registrar and Share Transfer Agent.

3. The Register of Members and Share transfer book of the Company will remain closed from 10th September, 2018 to 17th September,2018 (both days inclusive).

4. Members / Proxies should bring the attendance slip sent herewith duly filled in for attending the meeting.

5. Members are requested to send their queries at least ten days before the date of the meeting so that the information can be madeavailable at the meeting.

6. Statement pursuant to provisions of Section 102 of the Companies Act, 2013 is annexed hereto.

7. Unpaid / Unclaimed Dividend, Share application money received and due for refund and matured deposits unclaimed and unpaid for aperiod of seven years as applicable have been transferred to the Investor Education and Protection Fund pursuant to the provisionsof, the Companies Act.

NOTICE

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Annual Report 2017-20188. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every

participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to theirDepository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submittheir PAN details to the Company or to the Registrar.

9. Annual Report 2017-18 alongwith notice of the AGM, Attendance Slip, Proxy Form, process instructions and the manner of conductingE-Voting is being sent electronically to all members whose email ID are registered with the Company / Depository Participant(s). Formembers who request for a hard copy and those who have not registered their email address, physical copies of annual report arebeing sent through the permitted mode. Members who have not registered their email address are requested to get their email addressregistered with the Company / Depository Participants and update the same, if required. This may be treated as an advance opportunityin terms of proviso to Rule18(3) (i) of the Companies (Management and Administration) Rules, 2014.

10. All the documents, if any, referred to in this notice are available for inspection of the members at the registered office of the Companyon any working day except Saturday, between 10:00 a.m. to 1:00 p.m. up to the conclusion of this meeting.

11. Voting through electronic means

In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration)Rules, 2014, the company is pleased to provide members facility to exercise their right to vote at the 72nd Annual General Meeting(AGM) by electronic means and the business may be transacted through e-Voting Services provided by Central Depository Services(India) Limited (CDSL). The members shall refer to the detailed procedures on e-voting attached herewith.

12. In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-votingmanual available at www.evotingindia.com under help section or write an email to [email protected].

13. Members are required to vote only through the electronic system or through ballot at Annual General Meeting only and in no other form.In the event a member casts his votes through both the processes, the votes in the electronic system would be considered and theballot vote would be ignored.

14. The remote e-voting period commences on Saturday, 22nd September, 2018 (10.00 a.m.) and ends on Monday, 24th September, 2018(5.00 p.m.). During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on thecut-off date of Tuesday 18th September, 2018 may cast their votes electronically. The e-voting module shall be disabled by CDSL forvoting thereafter. Once the vote on a resolution is cast by the shareholder, the shareholder shall not be allowed to change it subsequently.

15. The e-voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the Company as on thecut-off date of 18th September, 2018. A person other than member on cut off date should treat this notice for information only.

16. A member may participate in the Annual General Meeting even after exercising his right to vote through e-voting, but shall not be allowedto vote again.

17. Shri Umesh Parikh, partner of Parikh Dave & Associates, Companies Secretaries, (Membership No.FCS:4152) has been appointed asthe Scrutinizer to scrutinize the e-voting process and voting process at AGM in a fair and transparent manner.

18. The scrutiniser shall, immediately after the conclusion of voting at the annual general meeting, first count the votes cast at the meeting,thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of thecompany and make, not later than three days of conclusion of the meeting, a consolidated scrutiniser’s report of the total votes cast infavour or against, if any, to the Chairman or a person authorised by him in writing who shall countersign the same.

19. The Results will be declared on receipt of Scrutinizer’s Report at Registered Office of the Company at Survey No. 359/B, 359/C, 361and 362, Rakhial - 382 315, Taluka - Dehgam, Dist. Gandhinagar, Gujarat. The Results declared along with the Scrutinizer’s Reportshall be placed on the Company’s website www.madhusudan-india.com and on the website of CDSL immediately and communicatedto the BSE.

20. Shri Thomas Koshy, Chief Executive Officer of the Company, “Madhusadan House”, Opp. Navrangpura Telephone Exchange,Ahmedabad - 380 006, shall be responsible for addressing all the grievances in relation to this annual general meeting including evoting.His contact details are E-mail: [email protected], Phone No. 079-26449781.

21. Members Holding Equity Shares in Electronic form and proxies thereof, are requested to bring their DP ID and Client ID for Identification.

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22. Brief resume of directors, proposed to be appointed / re-appointed at this Annual General Meeting is given below:

Name of Director Shri Sanwar Mal Shri Rajesh Shri Prem Chand Smt. RutvaAgarwal B. Shah Surana Acharya

Date of Birth 11.07.1953 11.11.1958 12.09.1960 05.07.1976

Date of appointment 07.08.2006 07.08.2006 30.07.2013 28.07.2014

Brief Resume and nature of expertise in Commercial Finance and Accounts and Administration &specific Functional areas Accounts Commercial Commercial

List of other directorships held Gujarat Soaps Anjani Tiles Limited Gujarat Soaps —Pvt. Ltd. Pvt. Ltd.

Chairman / Member of the Committees — — — —of the Board of other CompaniesShareholding in the Company 200 —- —- 150Disclosure of relationship between — — — —Directors Inter Se

Statement pursuant to provisions of Section 102 of the Companies Act, 2013.Item No. 3 to 5The Members of the Company, at the Annual General Meeting held on 26th September, 2014 had approved the appointment of Shri Rajesh B.Shah, Shri Prem Chand Surana and Smt. Rutva Acharya as an Independent Directors of the Company, whose terms are due to expire on 31 st

March, 2019. They are very experienced in their respective fields and managing the business affairs, having long association with theCompany, actively participative and guiding the board on many occasions. Smt.Rutva Acharya is holding 150 equity shares in the Company,while Shri Rajesh B. Shah and Shri Prem Chand Surana are not holding any shares.As per Section 149(10) of the Companies Act, 2013 (“Act”), an Independent Director shall hold office for a term of upto five consecutive yearson the Board of a Company, but shall be eligible for re-appointment on passing a special resolution by the Company for a Second term of uptofive consecutive years on the Board of a Company.In view of the aforesaid provisions of the Act and long association with Company, rich experience, valuable guidance to the management, itis proposed to re-appoint them for the second term as an Independent Directors on the Board of Company for a period of five consecutiveyears upto 31st March, 2024. Notices have been received from members, signifying their intention proposing Shri Rajesh B. Shah, Shri PremChand Surana and Smt. Rutva Acharya being appointed as Independent Directors of the Company. Their appointment as IndependentDirectors is also approved and recommended by the Nomination and Remuneration Committee of the Company.In the opinion of the Board, they fulfil the conditions specified in the Companies Act, 2013, rules made thereunder and SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015 for appointment as Independent Directors of the Company. They are also independent ofthe management of the Company.The Board considers that their continued association would be of benefit to the Company and it is desirable to continue to avail their servicesas Independent Directors.Accordingly, the Board recommends the Resolutions at Item Nos. 3 to 5 of the accompanying notice for re-appointment of Shri Rajesh B.Shah, Shri Prem Chand Surana and Smt. Rutva Acharya as Independent Directors by passing the special Resolution by the members of theCompany.The disclosure under Regulation 36 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is provided in the notesto this Notice.Except Shri Rajesh B. Shah, Shri Prem Chand Surana and Smt. Rutva Acharya, being appointees, none of your Directors or key ManagerialPersonnel of the Company or their relatives are concerned or interested financially or otherwise in the resolution as per the item Nos. 3 to 5of the notice.

Regd. Office : By Order of the Board of DirectorsSurvey No. 359/B, 359/C, 361 and 362,Rakhial – 382 315, Taluka - Dehgam, Dist. Gandhinagar. Dipshika Khatri28th May, 2018 Company SecretaryCIN : L29199GJ1945PLC000443

Procedure on e-voting

The instructions for shareholders voting electronically are as under:

(i) The voting period begins on 22nd September, 2018 (10.00 a.m.) and ends on 24th September, 2018 (5.00 p.m.). During this periodshareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date 18 th September,2018, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) The shareholders should log on to the e-voting website www.evotingindia.com.

(iii) Click on Shareholders.

(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

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Annual Report 2017-2018(v) Next enter the Image Verification as displayed and Click on Login.

(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, thenyour existing password is to be used.

(vii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders aswell as physical shareholders)

- Members who have not updated their PAN with the Company / Depository Participant are requested to use thesequence number which is printed on the address sticker.

Dividend Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in theBank company records in order to login.Details - If both the details are not recorded with the depository or company please enter the member id / folio number in theOR Date Dividend Bank details field as mentioned in instruction (iv).of Birth(DOB)

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares indemat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the newpassword field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company onwhich they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to shareyour password with any other person and take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN for relevant Madhusudan Industries Limited on which you choose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the optionYES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirmyour vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvii) If Demat account holder has forgotten the same password then enter the User ID and the image verification code and click on ForgotPassword & enter the details as prompted by the system.

(xviii) Shareholders can also use Mobile app - “m-Voting” for e-voting. M-Voting app is available on Apple, Android & Windows based Mobile.Shareholders may log in to m-Voting using their e voting credentials to vote for the company resolution(s).

(xix) Note for Non – Individual Shareholders and Custodians

- Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.comand register themselves as Corporates.

- A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

- After receiving the login details user would be able to link the account(s) for which they wish to vote on.

- The list of accounts linked in the log in should be mailed to [email protected] and on approval of the accounts theywould be able to cast their vote.

- A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any,should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xx) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-votingmanual available at www.evotingindia.com, under help section or write an email to [email protected].

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Directors' ReportToThe Members,

The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31 st

March, 2018.

PerformanceThe summary of your Company’s financial performance is given below:

Year ended Year endedMarch 31, 2018 March 31, 2017

(Rs. in lakhs) (Rs. in lakhs)

Profit before Depreciation and Taxes 153.84 296.22Deducting there from Depreciation 14.31 18.52Profit / Loss before tax after exceptional item 139.53 277.70Deducting therefrom taxes of:- Current Tax 7.85 3.50- Deferred Tax 25.15 63.44

Profit for the period 106.52 210.76

Add/(Less): Other Comprehensive Income (Net of Tax) (1.15) (1.56)

Total Comprehensive Income 105.37 209.20

Transfer to Reserves

Due to Carry forward loss of previous years the Company has not transferred any amount to General Reserve in the current year.

Highlights / Performance of the Company

Total income of the Company was Rs.109.54 Lakhs during the year.

Management Discussion and Analysis

a) Industry Structure and Developments

The Company continues its search for a viable project to be set up at the available facilities at Rakhial.

b) Opportunities and Threats

The Management is interested in undertaking a suitable venture that can be set up in the available land and infrastructure with theCompany. As such the Company does not face any threat in its existence.

c) Outlook

It will entirely depend on the project to be set up by the Company.

d) Risks and Concerns

Presently, Company is exposed to the prevalent risks of uncertainties and changes in government policies, unexpected regulatorychanges etc.

e) Internal Control Systems and their adequacy

The Company has computerized its accounting system since many years. Adequate internal control system exists in the Company andthe internal control system of the Company is commensurate with the size and complexity of the Company’s business. The operationsare subject to periodic internal audit by independent Auditors.

f) Financial performance with respect to Operational Performance is discussed in the main part of the report.

g) Material Developments in Human Resources, Industrial Relations, Environment, Health & Safety

The Company values and nurtures its human resources and Company would continue to adopt and implement the best HRD practicesin future. Manpower strength of the Company as on March 31, 2018 stands at 6.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014is annexed herewith as a separate Annexure-I.

Particulars of contracts or arrangements with related parties

All transactions entered into with Related parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm’s length basis.

There were no materially significant related party transactions made by the Company with Directors, Key Managerial Personnel or otherdesignated persons which may have a Potential Conflict with the interest of the Company at large. All related party transactions were placedbefore the Audit Committee and also the Board for approval. The Policy on related party transactions as approved by the Board is uploadedon the Company’s website i.e. www.madhusudan-india.com

The particulars of contracts or arrangement with related Parties as per Section 188(1) of the Companies Act, 2013, including arm’s lengthtransactions as per Form No. AOC – 2 are enclosed as separate Annexure – II.

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Annual Report 2017-2018Director’s Responsibility Statement

In compliance of Section 134(5) of the Companies Act, 2013, the Directors of your Company confirm:

- that in the preparation of annual accounts, the applicable accounting standards have been followed and that there are no materialdepartures;

- that such accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2018 and of the profit of the Companyfor the year ended on that date;

- that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the annual accounts have been prepared on a going concern basis.

- that internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequateand were operating effectively;

- that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.

Managerial Remuneration and Employees

Details required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are enclosedas a separate Annexure-III.

Details of employees as specified under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed to this report as annexure, however it is not being sent alongwith this Annual Report but available at the Registered Office of theCompany during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder on request, beingmade to the Company Secretary. The above detail is not being sent alongwith this Annual Report to the members in line with the provisionsof Section 136 of the Companies Act, 2013 and rules made thereunder.

Company has not offered its shares to its employees under ESOS during the year under review.

Company has not sanctioned loan to any of its employees for purchase of Company’s shares under any scheme.

Extract of Annual Return

The details forming part of the extract of the annual return in Form No.MGT-9 is annexed herewith as a separate Annexure-IV.

Corporate Governance

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on Corporate Governance alongwith PracticingCompany Secretary's Certificate on its compliance has been included in this Annual Report as a separate Annexure - V.

As per Regulation 15 the of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company is not required to complywith Regulations 17 to 27 and Clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V. However as a goodcorporate governance practice, the Company has been complying with all the aforesaid provisions / regulations voluntarily.

Number of Meetings of the Board

The Board of Directors, during the financial year 2017-18 duly met 5 times on 25.05.2017, 23.06.2017, 09.08.2017, 13.11.2017 and 08.02.2018in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Bookmaintained for the purpose.

Particulars of Loans, guarantees or investments

The loans if any, made by the Company are within the limits prescribed u/s 186 of the Companies Act, 2013 and no guarantee or security isprovided by the Company.

Details of investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Risk Management Policy

The Board has approved and implemented risk management Policy of the Company including identification and element of risks.

The Risk Management is overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The Committeeoversees Company’s process and policies for determining risk tolerance and review management’s measurement and comparison of overallrisk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigatingactions on a continuous basis. For details please refer to the Management Discussion and Analysis.

Audit Committee

The Company has constituted Audit Committee. For details please refer Corporate Governance Report attached as a separate Annexure-V.

Internal Control System and its Adequacy

The Company has internal control system commensurate with the size, scale and complexity of its business operations. The scope andfunctions of Internal Auditor are defined and reviewed by the Audit Committee. The Internal Auditor reports to the Chairman of the AuditCommittee. The Internal Auditor assesses opportunities for improvement of business processes, systems and controls, to providerecommendations, which can add value to the organisation.

Dividend

Due to carry forward loss of previous years the Board of Directors has not recommended any dividend. During the year the Company wasnot required to transfer unclaimed dividend to the Investor Education and Protection Fund.

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Share Capital

The paid up Equity Share Capital as on 31st March, 2017 was Rs.268.75 Lakhs. During the year under review the Company has not issuedany shares.

No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.

The Company was not required to transfer any Shares to Investor Education and Protection Fund, pursuant to the provisions of section 124& 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.

Exchequer

The Company has contributed Rs. 24.37 Lakhs to the exchequer by way of GST, Service Tax, Income tax and other fiscal levies.

Deposits

For the year under review, the Company has not accepted fixed deposit from the public falling within the ambit of Section 73 of the CompaniesAct, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. There have been no defaults in repayment of deposits or payment ofinterest thereon during the year.

The Company has no unclaimed/unpaid fixed deposits as at end of the year.

Directors

Members at the Annual General Meeting held on 26.09.2014 have appointed Shri Rajesh B. Shah, Shri Prem Chand Surana and Smt. RutvaAcharya as Independent Directors of the Company to hold office for five consecutive years for a term up to 31 st March, 2019 (they will not retireby rotation). Shri Rajesh B. Shah, Shri Prem Chand Surana and Smt. Rutva Acharya are proposed to be re-appointed as IndependentDirectors for second term of Five years at the ensuing AGM.

All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of TheCompanies Act, 2013 and SEBI (LODR) Regulations, 2015. There has been no change in the circumstance which may affect their status asIndependent Director during the year under review. The Company keeps informed independent directors about changes in the CompaniesAct, 2013 from time to time and their role, duties and responsibilities.

Shri. Sanwarmal Agarwal (DIN 0607627), director is due to retire at the end of the ensuing Annual General Meeting and being eligible, offershimself for re-appointment. Brief resumes of the Directors who are proposed to be reappointed at the ensuring Annual General meeting asrequired as per SEBI (LODR) Regulations, 2015 is provided in the notice convening the Annual General Meeting of the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, Schedule – IV of the Companies Act and SEBI (LODR)Regulations, 2015, the Board has carried the evaluation of its own performance, individual Directors, its Committees and Key ManagerialPersonnel, on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee ofthe Company.

The performance of each of the Independent Directors and non-independent directors was also evaluated by the Independent Directors at theseparate meeting held of Independent Directors of the Company.

Policy on Directors appointment and remuneration

Criteria determining the qualifications, positive attributes and independence of Directors.

Independent Directors

- Qualifications of Independent Director

An independent director shall possess appropriate skills, qualifications, experience and knowledge in one or more fields of finance, law,management, marketing, administration, corporate governance, operations or other disciplines related to the Company’s business.

- Positive attributes of Independent Directors

An independent director shall be a person of integrity, who possesses knowledge, qualifications, experience, expertise in any area,integrity, level of independence from the Board and the Company etc. Independent Directors are appointed on the basis of requirementof the Company, qualifications & experience, association with the Company etc. He should also devote sufficient time to his professionalobligations for informed and balanced decision making; and assist the Company in implementing the best corporate governance practices.

- Independence of Independent Directors

An independent director should meet the requirements of Section 149(6) of The Companies Act, 2013 and SEBI (LODR) Regulations,2015.

Other Directors and Senior Management

The Nomination and Remuneration Committee shall identify and ascertain the qualifications, expertise and experience of the person forappointment as Director or at Senior Management Level and recommend to the Board his/her appointment.

The Company shall not appoint or continue the employment of any person a Director or Senior Management Personnel if the evaluation of hisperformance is not satisfactory.

Other details are disclosed in the Corporate Governance Report under the head Nomination and Remuneration Committee and details ofRemuneration (Managing Director/Whole Time Director / Non-Executive Directors) are attached as separate Annexure V to this report.

Remuneration / commission from Holding or Subsidiary Company

The Company has no Holding Company or Subsidiary Company

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Annual Report 2017-2018Remuneration PolicyIt is separately disclosed in the Corporate Governance Report attached as a separate Annexure-V to this Report.Auditors and their ObservationsShailesh Shah & Associates., Chartered Accountants are the statutory auditors of the company. They are appointed for a period of five years,from the conclusion of AGM held on 22nd September, 2017 till the conclusion of the AGM to be held for the Financial year 2021-22.The Auditors’ Report and Secretarial Audit Report to the members for the financial year under review do not contain any qualification,reservation or adverse remarks or disclaimer.The Statutory Auditors have not reported any fraud during the year under review.Secretarial AuditPursuant to provisions of Section 204 of Companies Act, 2013 and Rules made there under, the Company has appointed Parikh Dave andAssociates, Practicing Company Secretaries to undertake the secretarial audit of the Company for the year 2018-19.The Secretarial Audit Report for the year 2017-18 given by Parikh Dave and Associates, Company Secretaries in practice is annexed with thisreport.The company is complying with the applicable Secretarial Standards.InsuranceYour Company has adequately insured all its properties.Industrial RelationsYour Company’s relations with its employees remained cordial throughout the year. The Directors wish to place on record their deepappreciation for the services rendered by staff members and executives of the Company.Your Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963.The Company has not received any complaint under The Sexual Harassment of women at Workplace (prevention, prohibition and redressal)Act, 2013.Material Changes Affecting Financial Position of the CompanyNo material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year ofthe Company to which the financial statements relate, i.e. 31st March, 2018 and the date of the Board’s Report.Change in Nature of BusinessThere has been no change in the nature of the business of the Company during the Financial year 2017-18.Orders passed by Regulatory Bodies or CourtsNo regulatory body or court or tribunal has passed any significant and material orders impacting the going concern status and operations ofthe company.Vigil MechanismThe company has implemented Vigil Mechanism. For details please refer Corporate Governance Report attached as a separate Annexure-V.AppreciationYour Directors would like to place on record their gratitude for the co-operation and assistance given by various departments of both Stateand Central Governments.

For and on behalf of the Board of Directors,

Ahmedabad Rajesh B. Shah28th May, 2018 P. C. Surana

P. K. ShashidharanSanwarmal D. Agarwal

Rutva AcharyaDirectors

Annexure I to the Directors' Report

Disclosure of particulars with respect to Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings andOutgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 andforming part of the Report of the Board of Directors for the year ended 31st March, 2018.

A. Conservation of Energy : NilB. Technology Absorption : NilC. Foreign Exchange earnings and outgo : Nil





9


Annexure II to the Directors' Report

FORM No.AOC-2

(Pursuant to clause (h) of sub-section(3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts / arrangements entered into by the company with related parties referred to insub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.

1) Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship

(b) Nature of contracts / arrangements / transactions

(c) Duration of the contracts / arrangements/ transactions

(d) Salient terms of the contracts or arrangements or transactionsincluding the value, if any NOT APPLICABLE

(e) Justification for entering into such contracts or arrangementsor transactions

(f) Date (s) of approval by the Board

(g) Amount paid as advances, if any;

(h) Date on which the special resolution was passed in generalmeeting as required under first proviso to section 188

2) Details of material contracts or arrangements or transactions at arm’s length basis

(a) Names of the related party and nature of relationship Gujarat Soaps Private Ltd. - Director interested

(b) Nature of contracts / arrangements / transactions Reimbursement of Expenses

(c) Duration of the contracts / arrangements/ transactions As and When actual payment made

(d) Salient terms of the contracts or arrangements or transactions No formal contractincluding the value, if any

(e) Date (s) of approval by the board if any, Every Board meeting held after payment

(f) Amount paid as advances, if any; NA

The other details are mentioned in note no. 28 of attached Financial Statements for the year ended 31-03-2018.





10

Annual Report 2017-2018Annexure III to the Directors' Report

Details as per Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014

S. N. Particulars

i. The ratio of the remuneration of each director to the medianremuneration of the employees of the company for the financialyear

ii. The % increase in remuneration of each Director, Chief FinancialOfficer, Chief Executive Officer, Company Secretary or Manager,if any in the financial year

iii. The % increase in the median remuneration of employees in thefinancial year

iv. The number of permanent employees on the rolls of company.

v. Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financialyear and its comparison with the percentile increase in themanagerial remuneration and justification thereof and point out ifthere are any exceptional circumstances for increase in themanagerial remuneration.

vi. Affirmation that the remuneration is as per the remuneration policyof the company.





There is no working director in the Company and no remunerationwas paid to any director except sitting fees.

10.94%

6

The percentage increase in salary of employees in last financialyear is 10.94%. There was no wholetime director (ManagerialPersonnel defined under the Companies Act) in the Company.Annual increase in remuneration was based on remunerationpolicy, qualifications and experience, responsibilities shoulderedand individual performance of the employees.

Directors KMPs NIL CEO CFO CS

14.00% 10.66% 11.20%

Remuneration is as per the remuneration policy of the Company.

11


Annexure IV to the Directors' ReportForm No. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31.03.2018

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:i) CIN : L29199GJ1945PLC000443ii) Registration Date : 27.08.1945iii) Name of the Company : MADHUSUDAN INDUSTRIES LIMITEDiv) Category / Sub-Category of the Company : Public Limited Companyv) Address of the Registered office and contact details : Survey No. 359/B, 359/C, 361 and 362, Rakhial – 382 315, Taluka - Dehgam,

Dist. Gandhinagar. Phone : (02716) 267270 Fax (079) 26427287vi) Whether listed Company ? Yes / No : Yesvii) Name, Address and Contact details of Registrar : MCS Share Transfer Agent Limited,

and Transfer Agent, if any 201, Shatdal Complex, 2nd Floor, Opp. Bata Show Room,Ashram road, Ahmedabad – 380 009.Phone : (079) 26580462 Email ID : [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

SI. No. Name and Description of main NIC Code of the Product/ service % to total turnover of the companyproducts / services

1 NIL NIL NIL

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl.No. Name and Address of the Company CIN/GLN Holding/ % of shares ApplicableSubsidiary/Associate held Section

1 NIL NIL NIL NIL NIL

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Category of No. shares held at the beginning No. shares held at the end % changeShareholders of the year of the year during

Demat Physical Total % of total Demat Physical Total % of total the YearShares Shares

(A) Shareholding ofPromoter andPromoter Group

1 Indian(a) Individuals/ Hindu 1090942 0 1090942 20.30 1143222 0 1143222 21.27 0.97

Undivided Family(b) Central Government/ 0 0 0 0.00 0 0 0 0.00 0.00

State Government(s)

(c) Bodies Corporate 2015344 0 2015344 37.49 2015344 0 2015344 37.49 0.00

(d) Financial Institutions/ 0 0 0 0.00 0 0 0 0.00 0.00Banks

(e) Any Others(Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total(A)(1) 3106286 0 3106286 57.79 3158566 0 3158566 58.76 0.972 Foreign(a) Individuals (Non-

Residents Individuals/Foreign Individuals) 0 0 0 0.00 0 0 0 0.00 0.00

(b) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00(c) Financial Institutions/Banks 0 0 0 0.00 0 0 0 0.00 0.00(d) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00(e) Any Others(Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub Total(A)(2) 0 0 0 0.00 0 0 0 0.00 0.00

Total Shareholding of 3106286 0 3106286 57.79 3158566 0 3158566 58.76 0.97Promoter and PromoterGroup (A)=(A)(1)+(A)(2)

12


Category of No. shares held at the beginning No. shares held at the end % changeShareholders of the year of the year during

Demat Physical Total % of total Demat Physical Total % of total the YearShares Shares

(B) Public shareholding .

1 Institutions

(a) Mutual Funds/ UTI 0 275 275 0.01 0 275 275 0.01 0.00

(b) Financial Institutions / 0 2625 2625 0.05 0 2625 2625 0.05 0.00Banks

(c) Central Government/ 0 0 0 0.00 0 0 0 0.00 0.00State Government(s)

(d) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00

(e) Insurance Companies 268492 0 268492 5.00 268492 0 268492 5.00 0.00

(f) Foreign Institutional 0 0 0 0.00 0 0 0 0.00 0.00Investors

(g) Foreign Venture 0 0 0 0.00 0 0 0 0.00 0.00Capital Investors

(h) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00

(i) Any Other (specify) - 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total (B)(1) 268492 2900 271392 5.05 268492 2900 271392 5.05 0.00

2 Non-institutions

(a) Bodies Corporate 118354 8870 127224 2.37 150743 8520 159263 2.96 0.59

(b) Individuals

I Individual shareholders 682462 377062 1059524 19.71 761318 369582 1130900 21.04 1.33holding nominal sharecapital up to Rs. 1 lakh

II Individual shareholders 787365 0 787365 14.64 611296 0 611296 11.37 (3.27)holding nominal sharecapital in excess ofRs. 1 lakh

(c) Qualified Foreign 0 0 0 0.00 0 0 0 0.00 0.00Investor

(d) Any Other (specify)

I Hindu Undivided Family 21685 250 21935 0.41 41674 250 41924 0.78 0.37

II Non Resident Individual 524 750 1274 0.02 909 750 1659 0.03 0.01

Sub-Total (B)(2) 1610390 386932 1997322 37.16 1565940 379102 1945042 36.18 (0.97)

(B) Total Public 1878882 389832 2268714 42.21 1834432 382002 2216434 41.24 (0.97)Shareholding(B)=(B)(1)+(B)(2)

TOTAL (A)+(B) 4985168 389832 5375000 100.00 4992998 382002 5375000 100.00 0.00

(C) Shares held byCustodians andagainst whichDepository Receiptshave been issued

1 Promoter and 0 0 0 0.00 0 0 0 0.00 0.00Promoter Group

2 Public 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total (C) 0 0 0 0.00 0 0 0 0.00 0.00

GRAND TOTAL 4985168 389832 5375000 100.00 4992998 382002 5375000 100.00 0.00(A)+(B)+(C)

13


(ii) Shareholding of Promoters

Sr. Name of the Shareholding at the Shareholding at theNo. shareholder beginning of the year end of the year

No. of % of % of Shares No. of % of % of Shares % change inShares total pledged / Shares total pledged / shareholding

shares of encumbered shares of encumbered duringthe to total the to total the year

company shares company shares1 Vikram Investment Co. Ltd. 936640 17.43 0.00 936640 17.43 0.00 0.002 Madhusudan Holdings Ltd. 440600 8.20 0.00 440600 8.20 0.00 0.003 Vikram Somany 458264 8.53 0.00 510544 9.50 0.00 0.974 Rekha Commercial Ltd. 266194 4.95 0.00 266194 4.95 0.00 0.005 Trisure Promotions & 242200 4.51 0.00 242200 4.51 0.00 0.00

Tradings Ltd.6 Smiti Somany 613120 11.41 0.00 613120 11.41 0.00 0.007 Suvinay Trading & 129710 2.41 0.00 129710 2.41 0.00 0.00

Investment Co. Ltd.8 Deepshikha Khaitan 19558 0.36 0.00 19558 0.36 0.00 0.00

TOTAL 3106286 57.79 0.00 3158566 58.76 0.00 0.97

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

SI. Shareholding at the beginning of the year Cumulative Shareholding during the yearNo. No. of shares % of total No. of shares % of total

shares of the company shares of the companyAt the beginning of the year 3106286 57.79 3106286 57.79Shares Purchase byShri Vikram Somany1 16.11.2017 1825 0.03 3108111 57.832 17.11.2017 1732 0.03 3109843 57.863 21.11.2017 14443 0.27 3124286 58.134 05.12.2017 3000 0.06 3127286 58.185 06.12.2017 5000 0.09 3132286 58.286 07.12.2017 4000 0.07 3136286 58.357 08.12.2017 10000 0.19 3146286 58.548 02.02.2018 12280 0.23 3158566 58.76At the end of the year 3158566 58.76 3158566 58.76

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):Sr. For Each of the top 10 Shareholding at the Shareholding at theNo. Shareholders beginning of the year end of the year

No. of Shares % of total No. of Shares % of totalshares of shares of

the Company the Company1 Life Insurance Corporation of India 150029 2.79 150029 2.79

No Change2 Sajan Kumar Pasari 128570 2.39 128570 2.39

No Change3 Saurav Gupta 109172 2.03 106433 1.98

Sale: Cumulative Holdings : 04.08.2017 - 109082, 13.10.2017 - 108115, 20.10.2017 - 107333, 27.10.2017 - 1064334 General Insurance Corporation of India 98948 1.84 98948 1.84

No Change5 S Kumar & Sons Holding Pvt. Ltd. 85000 1.58 85000 1.58

No Change6 Vinodchandra Muljibhai Shah 36071 0.67 58675 1.09

Purchase : Cumulative Holdings - 9.06.2017 - 36571, 14.07.2017 - 37761, 21.07.2017 - 37436, 11.08.2017 - 38236,27.10.2017 - 38636, 3.11.2017 - 38836, 10.11.2017 - 38839, 08.12.2017 - 39339, 15.12.2017 - 42339, 22.12.2017 - 45639,30.12.2017 - 47439, 05.1.2018 - 49439, 12.01.2018 - 54139, 19.01.2018 - 58139, 26.01.2018 - 58675Sale : 21.07.2017 - 37436

7 Sheo Kumar Agarwal 0 0.00 57700 1.07Purchase:Cumulative Holdings - 09.02.2018 - 8000, 16.02.2018 - 47437, 23.02.2018 - 50140, 02.03.2018 - 50830, 16.03.2018- 56100, 23.03.2018 - 57700

8 Dipak Kanayalal Shah 50000 0.93 55000 1.02Purchase:Cumulative Holdings - 01.09.2017 - 53700, 03.11.2017 - 54700, 16.02.2018 - 55000

9 Sunil Kumar Daga 42652 0.79 42652 0.79No Change

10 Anil Kumar Maskara 31694 0.59 31694 0.59No Change

14

Annual Report 2017-2018(v) Shareholding of Directors and Key Managerial Personnel

Sr. Shareholding at the beginning of Shareholding at the end ofNo. the year the year

For each of the Directors and KMP No. of shares % of total shares No. of shares % of total sharesof the company of the company

1 Shri Rajesh B. Shah 0 0.00 0 0.00

2 Shri P. K. Shashidharan 0 0.00 0 0.00

3 Smt. Rutva Acharya 150 0.00 150 0.00

4 Shri P. C. Surana 0 0.00 0 0.00

5 Shri S. M. Agarwal 200 0.00 200 0.00

6 Shri Thomas Koshy 50 0.00 50 0.00

7 Shri Tarun Panchal 0 0.00 0 0.00

8 Ms. Dipshika Khatri 0 0.00 0 0.00

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment (Rs. in Lakhs)

Particulars Secured Loans Unsecured Loans Deposits Totalexcluding deposits Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 0 0 0 0

ii) Interest due but not paid 0 0 0 0

iii) Interest accrued but not due 0 0 0 0

Total (i+ii+iii) 0 0 0 0

Change in Indebtedness during the financial year

Addition 0 0 0 0

Reduction 0 0 0 0

Net Change 0 0 0 0

Indebtedness at the end of the financial year

i) Principal Amount 0 0 0 0

ii) Interest due but not paid 0 0 0 0

iii) Interest accrued but not due 0 0 0 0

Total (i+ii+iii) 0 0 0 0

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/ or Manager:

SI. Particulars of Remuneration Name of MD/WTD/ Manager Total Amount (Rs.)no.

1 Gross salary

(a) Salary as per provisions contained insection 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3)Income-tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission

- as % of Profit

- Others, specify

5 Others, specify (perq + PF)

Total (A)

Celling as per Act

There is no Managing Director,Whole-time Director or Manager in

the Company.

15


B. Remuneration to other directors:

SI. Particulars of Remuneration Name of Directors Totalno. Amount

Rajesh P. C. Rutva (Rs. inB. Shah Surana Acharya Lakhs)

1 Independent Directors

• Fee for attending board / committee meetings 0.10 0.10 0.10 0.30

• Commission 0 0 0 0

• Others, please specify 0 0 0 0

Total (1) 0.10 0.10 0.10 0.30

2 Other Non-Executive Directors P.K. Shashidharan S. M. Agarwal

• Fee for attending board / committee meetings 0.06 0.10 0.16

• Commission 0 0 0

• Others, please specify 0 0 0

Total (2) 0.06 0.10 0.16

Total (B)=(1)+(2) 0.46

Total Managerial Remuneration 0.46

Overall Ceiling as per the Act Only sitting fees paid

C. Remuneration to key managerial personnel other than MD / Manager / WTD

SI. Particulars of Remuneration Key Managerial Personnel Totalno. CEO CS CFO Amount

1 Gross salary (Rs. in Lakhs)

(a) Salary as per provisions contained in section 17(1) 18.13 1.49 6.01 25.63of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 0 0 0 0

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 0 0 0 0

2 Stock Option 0 0 0 0

3 Sweat Equity 0 0 0 0

4 Commission

- as % of profit 0 0 0 0

- others. specify... 0 0 0 0

5 Others, please specify (Perq + PF) 1.24 0.08 0.35 1.67

Total 19.37 1.57 6.36 27.30

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES : NIL

Type Section of the Brief Details of Authority AppealCompanies Act Description Penalty/ [RD / NCLT/ made, if any

Punishment/ COURT] (give Details)Compounding

fees imposedA. COMPANY

PenaltyPunishmentCompounding

B. DIRECTORSPenalty NILPunishmentCompounding

C. OTHER OFFICERS IN DEFAULTPenaltyPunishmentCompounding





16

Annual Report 2017-2018Annexure V to the Directors' Report

CORPORATE GOVERNANCE REPORT(As required under the Companies Act, 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015)

1) Company’s Philosophy

The Company believes in the practice of good CorporateGovernance and acting as a good corporate citizen.

The spirit of Corporate Governance has been prevailing in theCompany. The Company believes in the values oftransparency, professionalism and accountability. TheCompany recognizes the accountability of the Board andimportance of its decisions on its customers, dealers,employees, shareholders, and with every individual, who comesin contact with the Company.

2) Board of Directors

The Board comprises of 5 (five) Non-Executive Directors.

The Company did not have any pecuniary relationship ortransactions with the Non-Executive Directors during the periodunder review.

During the year, 5 (four) Board Meetings were held on25.05.2017, 23.06.2017, 09.08.2017, 13.11.2017 and08.02.2018.

None of the directors on the Board are members in more thanten committees and they do not act as Chairmen of more thanfive committees across all companies in which they aredirectors.

The composition of Board of Directors and their attendance atthe Board meetings during the year and at the last AnnualGeneral Meeting as also number of other directorships andCommittee Memberships are given below:

Sr. Name of Category of No. of Atten- No. of No. ofNo. Director Directorship Board dance Other Other

Meetings At director- Committeeattended last ships Member-

AGM ships

1. Shri Rajesh B. Shah Non-Executive 5 YES 1 -IndependentDirector

2. Shri Sanwarmal Non-Executive 5 YES 1 -Agarwal Director

3. Shri P. K. Non-Executive 3 YES - -Shashidharan Director

4. Shri Prem Chand Non-Executive 5 YES 1 -Surana Independent

Director

5. Smt. Rutva Acharya Non-Executive 5 N O - -IndependentDirector

The Company provides the information as set out in Regulation 17read with Part A of Schedule II of SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015 to the Board and theBoard Committees to the extent it is applicable and relevant. Suchinformation is submitted either as part of the agenda papers inadvance of the respective meetings or by way of presentationsand discussions during the meeting.

All Independent Directors are experienced and competent fromtheir respective field. They actively participate in the Board andCommittees which gives significant value addition in the decision-making process. Familiarization programs imparted to independentdirectors is posted on company’s website www.madhusudan-india.com

None of the Directors are related to any other director on the Boardin term of Definition of ‘relative’ as per the Companies, Act, 2013.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 andRegulations of the SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, the Board has carried outthe annual performance evaluation of its own performance,the Directors individually as well as the evaluation of the workingof its Audit Committee, Nomination and RemunerationCommittee and Stakeholders Relationship Committee. TheBoard’s functioning such as adequacy of the composition ofthe Board and its Committees, Board culture, execution andperformance of the specific duties, obligations and governancewere also evaluated.

A separate exercise was carried out to evaluate theperformance of individual Directors, who were evaluated onparameters such as level of engagement and contribution,independence of judgement, safeguarding the interest of theCompany and its shareholders etc. The performanceevaluation of the Independent Directors was carried out by theentire Board. The performance evaluation of the Independentand Non-Independent Directors was carried out by theIndependent Directors, who also reviewed the performance ofthe Secretarial Department. The Directors expressed theirsatisfaction with the evaluation process.

Independent Directors’ Meeting:

During the year under review, the Independent Directors met on03.03.2018 inter alia, to discuss:

- Evaluation of the performance of Independent directors, Non-Independent Directors, the Board of Directors as whole andKey Managerial Personnel;

- Evaluation of the performance of the Board of Directors, takinginto account the views of the Directors.

- Evaluation of the quality, content and timelines of flow ofinformation between the Management and the Board that isnecessary for the Board to effectively and reasonably performits duties.

Prohibition of Insider Trading:

In Compliance with the SEBI Regulations on Prevention ofInsider Trading, the Company has framed a Code of Conductto avoid any insider trading and it is applicable to all theDirectors, Promoters, Senior Managerial Personnel and otherconnected persons of the Company who are expected tohave access to the unpublished price sensitive informationrelating to the Company. The Code lays down guidelines,which advises them on procedure to be followed anddisclosures to be made, while dealing in the shares of theCompany.

Code of Conduct

The Company has implemented model code of conduct for theBoard members and senior Officers of the Company. Thecode of conduct has been posted on the website of theCompany i.e. www.madhusudan-india.com

Risk Management Policy

The Board of directors has framed, approved and implementedRisk Management Policy of the Company including identificationand element of risks.

17


experience of the employee, responsibilities handled by himand his individual performance, etc.

The objectives of the remuneration policy are to motivateemployees to excel in their performance, recognize theircontribution and to retain talent in the organization and accordmerit.

6) Details of remuneration for the year ended 31.03.2018

(i) Managing Director / Whole-time Director(s)

The company has no Whole – time Director(s).

(ii) Non-Executive Directors

Remuneration by way of sitting fees for attending Boardmeetings was paid to the non-executive directors. Nocommission is proposed to be paid to the Non- ExecutiveDirectors for the year ended 31st March, 2018. The detailsof sitting fees paid to them during the year are as under:

Name Sitting Fees (Amt. in Lakhs)

Shri Rajesh B. Shah 0.10Shri Prem Chand Surana 0.10Shri Sanwar Mal Agarwal 0.10Shri P. K. Shashidhaan 0.06Smt. Rutva Acharya 0.10

Total 0.46

(iii) Shareholding of Non-Executive Directors

Name No. of % of totalShares held shareholding

Shri Rajesh B. Shah NIL NILShri Sanwar Mal Agarwal 200 0.00Shri Prem Chand Surana NIL NILShri P. K. Shashidharan NIL NILSmt. Rutva Acharya 150 0.00

7) Share Transfer Committee

In accordance with the SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, the Board had delegatedthe powers of share transfers to the Share TransferCommittee. In order to expedite the process of share transfers/ transmissions / splits / consolidation, the Committee meets atleast once in 10-15 days.

The Share transfer committee consists of three directorsnamely Shri P.C. Surana – Chairman (independent), ShriRajesh B. Shah (independent) and Shri Sanwarmal Agarwal.

Share Transfer Agent

The Company has appointed MCS Share Transfer AgentLimited, a SEBI registered Registrar and Share Transfer Agent.

8) Stakeholders Relationship Committee

The Stakeholders Relationship Committee, consists of 4 (four)directors namely Shri P.C. Surana – Chairman (independent),Shri Sanwarmal Agarwal, Shri P.K. Shashidharan and Smt.Rutva Acharya (independent).

All investor complaints, which can not be settled at the level ofCompany Secretary and Compliance Officer, are forwardedto the Stakeholders Relationship Committee for final settlement.

During the year 2017-18, the Company had received 1complaint from the Shareholders.

All the complaints received from the Shareholders wereresolved. There is no complaint pending as of 31.03.2018,which is not attended / replied by the Company.

The Company confirms that there were no share transferslying pending as on date which were received upto 31.03.2018and all requests for dematerialization and re-materialization of

3) Audit Committee

The Audit Committee, consists of 4 (Four) directors, namelyShri Rajesh B. Shah – Chairman (independent), Shri PremChand Surana (independent), Shri Sanwarmal Agarwal andSmt. Rutva Acharya (independent). The Company Secretaryis also Secretary to the Audit Committee. During the year, 5(five) Audit Committee Meetings were held on 25.05.2017,23.06.2017, 09.08.2017, 13.11.2017 and 08.02.2018.

Terms of reference:

The role and terms of reference of the Audit Committee coverthe matters specified for Audit Committees under Regulation18 and Part – C of Schedule - II of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015 and Section177 of the Companies Act, 2013.

Details of no. of meetings and attendance there at is as under.

Name Of Director No. of Meetings

Held Attended

Shri Rajesh B. Shah 5 5Shri Prem Chand Surana 5 5Shri Sanwarmal Agarwal 5 5Smt. Rutva Acharya 5 5

4) Nomination and Remuneration Committee

The Nomination and Remuneration Committee, consists of 4(Four) directors namely, Shri Rajesh B. Shah – Chairman(independent), Shri Prem Chand Surana (independent), ShriSanwarmal Agarwal and Smt. Rutva Acharya (independent).

The Committee fixes the Remuneration of Whole TimeDirectors, which include all elements of remuneration packagei.e. salary, benefits, bonus, incentives, pension, retirementbenefits and such other benefits.

The Committee also decides the fixed component andperformance linked incentives, performance criteria, servicecontracts, notice period, severance fees etc. of theremuneration package of working directors, as may benecessary. Presently the company has no Whole time director.During the year under review one meeting was held on25.05.2017.

Independent Directors are appointed and their performance isevaluated based on the criteria such as knowledge,qualifications, experience, expertise in any area, integrity, levelof independence from the Board and the Company, number ofmeetings attended, familiarization programs attended, timedevoted etc. Executive Directors are appointed on the basisof requirement of the Company, qualifications & experience,association with the Company, loyalty etc. Executive Directorsare preferably promoted from within the Company based onabove criteria. The committee recommends appointment ofdirectors to the board.

Details of no. of meetings and attendance there at is as under.

Name Of Director No. of Meetings

Held Attended

Shri Rajesh B. Shah 1 1Shri Prem Chand Surana 1 1Shri Sanwarmal Agarwal 1 1Smt. Rutva Acharya 1 1

5) Remuneration Policy

Remuneration of employees largely consists of basicremuneration and perquisites.

The component of the total remuneration varies for differentgrades and is governed by Industry pattern, qualifications and

18

Annual Report 2017-2018shares as on that date were confirmed / rejected into theNSDL / CDSL system.

During the year, one meeting was held on 25.05.2017.

Ms. Deepshika Khatri, Company Secretary is a ComplianceOfficer.

9) General Body MeetingsThe last three Annual General Meetings were held as under:Financial Date Time VenueYear ended

31.03.2017 22.09.2017 11.30 a.m. Survey No. 359/B,359/C, 361 & 362,Rakhial - 382315,Taluka – Dehgam,Dist. Gandhinagar



During the last three Annual General meetings no specialResolution was passed. No resolution through postal ballot isrequired to be passed during the last three years and in thecurrent year also no resolution is proposed through postalballot as on date.

10) Means of Communication1. Quarterly results are published in leading dai ly

newspapers viz. Financial Express / Indian Express anda local language newspaper viz. Financial Express/JaiHind. The annual results (Annual Reports) are circulatedto all the members of the Company either electronically orin physical form.

2. Management Discussion & Analysis, forms part of thisAnnual Report, which is also being posted to all themembers of the Company.

3. The official news releases, if any, are given directly to thepress and simultaneously to the Stock Exchanges.

4. The Company sends its financial results, Shareholdingpattern and other information to BSE Limited. They uploadthese information on their websi te. i .e. http://www.bseindia.com. The said information is also availableon the company’s website www.madhusudan-india.com.

11) General Shareholders' Information

1. Annual General MeetingDate and Time : 25th September, 2018 at 11:30 a.m.Venue : Survey No. 359/B, 359/C, 361 & 362,

Rakhial – 382315, Taluka – Dehgam,Dist. Gandhinagar.

2. Financial Calendar 2018-19 (tentative)Annual General Meeting By 3rd / 4th week of

September, 2019Results for quarter ending By 15th day ofJune 30, 2018 August, 2018September 30, 2018 November, 2018December 31, 2018 February, 2019Results for year ending By 29th May, 2019March 31, 2019 (Audited)

3. Book Closure date 10th September, 2018 to 17th

September, 2018. (Both daysinclusive)

4. Dividend paymentIn order to conserve the resources, no dividend isrecommended by the Board of Directors for the year ended31.03.2018.

5. Listing on Stock Exchange

The Company’s shares are listed at BSE Limited, 1st Floor,New Trading Ring, Rotunda Building, P J Towers, DalalStreet, Fort, Mumbai - 400 001. The company has paidlisting fees of the years 2017-18 and 2018-19 to the StockExchange. Listing details of the shares of the Company atthe Stock Exchange is as under

BSE Limited

Stock Code : 515059

Scrip ID : MADHUIN

6. Share price at BSE Ltd.

Month High (Rs.) Low (Rs.)

April, 2017 16.70 13.25May, 2017 16.45 13.25June, 2017 16.70 13.06July, 2017 25.00 13.85August, 2017 21.40 17.20September, 2017 22.05 16.80October, 2017 30.50 20.15November, 2017 24.25 20.60December, 2017 22.25 19.00January, 2018 21.90 18.05February, 2018 22.00 18.65March, 2018 20.45 14.95

7. Registrar and Share Transfer Agent

Enti re Share Transfer and dematerial ization /rematerialization job is assigned to R & T Agent, MCSShare Transfer Agent Limited, a SEBI registered ShareTransfer Agent. Request for Share transfer,dematerialization and rematerialization should be sentdirectly to MCS Share Transfer Agent Limited, 201, ShatdalComplex, 2nd Floor, Opp. Bata Show Room, AshramRoad, Ahmedabad–380 009. Shareholders have option toopen their accounts with either NSDL or CDSL as theCompany has entered into agreements with both of thesedepositories.

Share

Price

(R

s.)

25.00

22.00

19.00

16.00

13.00

10.00

37,000.00

34,000.00

31,000.00

28,000.00

35,000.00

MIL Share Price (Rs.) BSE SENSEX

Apr,17

May,

17

Jun,1

7

Jul,1

7

Aug,1

7

Sep,1

7

Oct

,17

Nov,

17

Dec,

17

Jan,1

8

Feb,1

8

Mar,18

19


8. Share Transfer SystemThe share transfer/s is normally effected within a periodof 10-15 days from the date of receipt, provided thedocuments being complete in all respects. The Companyhas formed Share Transfer Committee of directors, whichmeets atleast once in 10-15 days for effecting transfer ofshares and other related matters.

9. Distribution of Shareholding as on 31.03.2018

Shares Total No. of No. ofShares Shareholders

1 – 500 6,25,522 4912501 – 1,000 94,790 1181,001 – 2,000 1,26,645 832,001 – 3,000 80,148 323,001 – 4,000 46,574 134,001 – 5,000 40,673 95,001 – 10,000 1,44,831 1910,001 – 50,000 3,36,454 1550,001 – 1,00,000 3,55,323 51,00,001 And Above 35,24,040 10

Total 53,75,000 5,216

10. Pattern of Shareholding as on 31.03.2018.

Sr. Category No. of Shares (%) ofNo. Shares

1. NRIs 1659 0.032. Financial Institutions/ Banks/

Insurance Companies 2,71,117 5.043. Mutual Funds 275 0.014. Promoters 31,58,566 58.765. Bodies Corporate 1,59,263 2.966. Indian Public 17,84,120 33.20

Total 53,75,000 100.00

11. Dematerialisation of Shares as on 31.03.2018As on 31.03.2018, 92.89% of the Company’s total sharesrepresenting 49,92,998 Shares were held indematerialized form and the balance 7.11% representing3,82,002 shares were in paper form.The ISIN Number in NSDL and CDSL is “INE 469C01023”.

12. Secretarial Audit for reconciliation of CapitalPursuant to SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015 a practicing companysecretary carried out the Secretarial Audit for all thequarters of Financial Year 2017-18. The Audit Reportsconfirms that there is no discrepancy in the issued, listedand admitted capital of the Company.

13. There are no outstanding global depository receipts orAmerican depository receipts or warrants or convertibleinstruments issued by the company.

14. Plant LocationsPresently there is no operational plant of the Company.The Company’s Registered Office is situated at thefollowing place:Survey No. 359/B, 359/C, 361 & 362,Rakhial – 382315, Taluka – Dehgam, Dist. Gandhinagar.

15. Address for CorrespondenceThe Company’s Registered Office is situated at SurveyNo. 359/B, 359/C, 361 & 362, Rakhial, Tal. – Dehgam,Dist. Gandhinagar – 382315. Shareholders’correspondence should be addressed either to theRegistered Office of the Company as stated above orAhmedabad Office at “Madhusudan House”, Opp.Navrangpura Telephone Exchange, Ahmedabad - 380006or to the Registrar and Share Transfer Agent, MCS ShareTransfer Agent Limited, 201, Shatdal Complex, 2nd Floor,Opp. Bata Show Room, Ashram Road, Ahmedabad–380009, Contact No. 079-26580462, Emai l :[email protected] Company has partly adopted non-mandatoryrequirements.

12) Other Disclosures1. There were no transactions of material nature with the

directors or the management or their subsidiaries orrelatives etc. during the year, which could have potentialconflict with the interests of the Company at large.

2. Disclosure of Accounting Treatment: These FinancialStatements are prepared in accordance with IndianAccounting Standards (Ind AS) as per the Companies(Indian Accounting Standards) Rules, 2015 and theCompanies (Indian Accounting Standards) (Amendment)Rules, 2016 notified under Section 133 of the CompaniesAct, 2013 (the ‘Act’) and other relevant provisions of theAct. The Financial Statements up to and for the year ended31st March, 2017 were prepared to comply in all materialaspects with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies(Accounts) Rules, 2014 and the relevant provisions ofthe Act. The previous year figures have been regrouped/reclassified or restated as per Ind AS, so as to make thefigures comparable with the figures of current year. Asthese are the first Financial Statements prepared inaccordance with Indian Accounting Standards (Ind AS),Ind AS 101 ‘First Time Adoption of Indian AccountingStandards’ has been applied. An explanation of how thetransition to Ind AS has affected previously reportedfinancial position, financial performance and cash flowsof the Company is provided in the financial Statements atappropriate places.

3. There were no instances of non-compliance, penalty orstrictures imposed on the company by Stock Exchanges,SEBI or other statutory authority of any matter related tothe capital market, during the last three years.

4. Vigil Mechanism (Whistle Blower Policy):The Company has implemented a Vigil Mechanism(whistle Blower policy) and is posted on the Company’swebsite i.e.www.madhusudan-india.com and no personis denied access to the Audit Committee.

5. The Company has partly adopted non-mandatoryrequirements. The company has no managing director.The company is having unmodified audit opinion. TheInternal Auditor may report directly to the audit committee.The Company is complying with applicable SecretarialStandard.

6. The company has no subsidiary.7. Related Party Transactions

All transactions entered into with Related parties as definedunder the Companies Act, 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations,2015 during the financial year were in the ordinary courseof business and on an arm’s length basis and approvedby the Audit Committee and the Board of Directors. Therewere no materially significant transactions with relatedparties during the financial year which were in the conflictof interest of the Company.The Board has approved a policy for related partytransactions which has been uploaded on the website ofthe Company i.e. www.madhusudan-india.com.

8. Commodity Risk or Foreign Exchange RiskThe Company is not dealing in any activity which mayhave commodity price risk or Foreign Exchange risk orundertaken hedging activities.

9. CEO and CFO certificationAs per Regulation 17(8) and Part – B of Schedule II of theSEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015, a certificate from CEO and CFO hasbeen obtained.

10. The Company has no unclaimed shares, as the Companyhas not offered/issued any shares to the public to since1993.

For and on behalf of the Board of Directors,Ahmedabad Rajesh B. Shah28th May, 2018 P. C. Surana



20

Annual Report 2017-2018COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

To,The Members ofMadhusudan Industries LimitedCIN: L29199GJ1945PLC000443Survey No. 359/B, 359/C, 361 & 362,Tal.:Dehgam, Rakhial– 382315Gujarat, India

We have examined all relevant records of MADHUSUDAN INDUSTRIES LIMITED (“the Company”)for the purpose of certifying complianceof conditions of Corporate Governance as stipulated under para C of Schedule V read with Regulation 34(3) of SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015 for the year ended on March 31, 2018.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to theprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of the Company. This certificate is neither an assurance as tothe further viability of the Company nor of the effectiveness with which the management has conducted the affairs of the Company.

On the basis of the examination of the records produced, explanations and information furnished, we certify that the Company hasgenerallycomplied with the mandatory conditions of the Corporate Governance as stipulated in para C of Schedule V read with Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Since the paid-up share capital and net worth of the Company do not exceed Rupees Ten Crore and Rupees Twenty Five Crore respectivelyas on the last day of previous financial year i.e. as on March 31, 2018, the compliance with the Corporate Governance provisions as specifiedin Regulation 17 to 27 and Clauses (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, shall not apply to the Company. However as a good corporate governance practice, the Company hasbeen complying with the aforesaid provisions / regulations voluntarily.

This certificate is issued solely for the purpose of complying with the aforesaid regulations by the Company voluntarily.

FOR PARIKH DAVE & ASSOCIATESCOMPANY SECRETARIES

UMESH PARIKHPARTNER

PRACTICING COMPANY SECRETARYPlace : Ahmedabad FCS No.: 4152Date : 28th May, 2018 C. P. No.: 2413

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THECOMPANY’S CODE OF CONDUCT

This is to certify that the Company has laid down Code of Conduct for Board Members and Senior Management of the Company.

Further certified that the Members of the Board of Directors and Senior Management personnel have affirmed having complied with the Codeapplicable to them during the year ended 31st March, 2018.

For Madhusudan Industries Limited

Place : Ahmedabad Thomas KoshyDate : 28th May, 2018 Chief Executive Officer

21


Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED March 31, 2018

[Pursuant to section 204(1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014]

To,The Members,MADHUSUDAN INDUSTRIES LIMITEDCIN: L29199GJ1945PLC000443Survey No. 359/B, 359/C, 361 & 362,Tal.:Dehgam, Rakhial - 382315

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practicesby MADHUSUDAN INDUSTRIES LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided usa reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by thecompany and also the information provided by the Company, its officers, agents and authorized representatives during the conduct ofsecretarial audit; we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on March31, 2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliancemechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financialyear ended on March 31, 2018 according to the provisions of:

1) The Companies Act, 2013 (the Act) and the Rules made thereunder;

2) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder;

3) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

4) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment,Overseas Direct Investment and External Commercial Borrowings; - There are no Overseas Direct Investments/ External CommercialBorrowings made by the Company during the Audit period under review.

5) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Not applicable as

the Company has not issued any shares during the year under review;(d) The Securities and Exchange Board of India (Share Based Employees Benefits) Regulations, 2014 - Not Applicable as the

Company has not issued any Shares / options to the Directors /Employees under the said Regulations during the year underreview;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not Applicable as theCompany has not issued any debt securities during the year under review;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding theCompanies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not Applicable as the Company hasnot delisted its Equity Shares from any Stock Exchanges during the year under review;

(h) The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998- Not Applicable as the Company has notbought – back any of its securities during the year under review;

(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

We have also examined compliance with the applicable Standards / Clauses / Regulations of the following:(i) Secretarial Standards issued by The Institute of the Company Secretaries of India (ICSI) and made effective from time to time.(ii) The Uniform Listing Agreement entered into by the Company with BSE Limited (BSE).

Since the paid-up share capital and net worth of the Company do not exceed Rupees Ten Crore and Rupees Twenty Five Crore respectivelyas on the last day of previous financial year, the compliance with the Corporate Governance provisions as specified in Regulation 17 to 27 andClauses (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015, shall not apply to the Company. However as a good corporate governance practice, the Company has been complyingwith the aforesaid provisions / regulations voluntarily.

During the Audit period under review, the Company has complied with all material aspects of the applicable provisions of the Act, Rules,Regulations, Guidelines, Standards, etc. as mentioned above.

We further report that:

During the audit period under review there were no laws which were specifically applicable to the Company / Industry. However, havingregard to the compliance system prevailing in the Company and on examination of relevant documents and records on test - check basis, theCompany has complied with the material aspects of the following significant laws applicable to the Company:

1. The Indian Contract Act, 1872

2. Registration Act, 1908

3. The Bombay Stamp Act, 1958

22

Annual Report 2017-2018We further report that:

The Board of Directors of the Company is duly constituted and having all the directors as Non-Executive Directors and has adequate numberof Independent Directors. There were no changes which took place in the composition of the Board during the year under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven daysin advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting andfor meaningful participation at the meeting.

Decisions at the meetings of Board of Directors/ Committees of the Company were carried unanimously. We were informed that there wereno dissenting views of the members’ on any of the matters during the year that were required to be captured and recorded as part of theminutes.


Based on the review of compliance mechanism established by the Company, the information provided by the Company, its officers andauthorized representatives during the conduct of the audit and compliance certificate(s) placed before the Board Meeting, there are adequatesystems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance withapplicable general laws, rules, regulations and guidelines such as Labour Laws and Environmental Laws.


The compliance by the Company of the applicable financial laws like Direct and Indirect Tax laws, has not been reviewed in this Audit sincethe same have been subject to the review by the Statutory Auditors and other designated professionals.


During the audit period under review, there were no instances of:

a) Public/Right issue of shares/ debentures/sweat equity etc.

b) Redemption / buy-back of securities.

c) Obtaining the approval from shareholders under Section 180 of the Companies Act, 2013.

d) Merger / amalgamation / reconstruction, etc.

e) Foreign technical collaborations.


Place : Ahmedabad UMESH PARIKHDate : 18th May, 2018 PARTNER

PRACTICING COMPANY SECRETARYFCS No. 4152C P No. 2413

Note: This report is to be read with our letter of even date which is annexed as Annexure – A and forms an integral part of this report.

ANNEXURE - A

To,The Members,MADHUSUDAN INDUSTRIES LIMITEDCIN: L29199GJ1945PLC000443

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinionon these secretarial records based on our audit.

2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of thecontents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarialrecords. We believe that the process and practices followed by us provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the Compliance of laws, rules and regulations andhappening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of themanagement. Our examination was limited to the verification of procedure on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness withwhich the management has conducted the affairs of the Company.


Place : Ahmedabad UMESH PARIKHDate : 18th May, 2018 PARTNER

PRACTICING COMPANY SECRETARYFCS No. 4152C P No. 2413

23


Independent Auditors' Report

To,The Members of Madhusudan Industries Limited

Report in the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements ofMadhusudan Industries Limited (“the Company”), which comprisethe balance sheet as at 31st March 2018, and the statement ofProfit and Loss (including Other Comprehensive Income), the CashFlow Statement and the Statement of Changes in Equity for theyear then ended, and a summary of the significant accountingpolicies and other explanatory information.

Management’s Responsibility for the Ind AS FinancialStatements

The Company’s Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act, 2013 (“the Act”)with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the state of affairs (financial position),profit or loss (financial performance including other comprehensiveincome), cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted inIndia, including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with the Companies (IndianAccounting Standards) Rules, 2015, as amended, and otheraccounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that arereasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, that wereoperating effectively for ensuring the accuracy and completenessof the accounting records, relevant to the preparation andpresentation of the Ind AS financial statements that give a true andfair view and are free from material misstatement, whether due tofraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Ind AS financialstatements based on our audit.

In conducting our audit, we have taken into account the provisionsof the Act, the accounting and auditing standards and matters whichare required to be included in the audit report under the provisionsof the Act and the Rules made thereunder and the Order issuedunder section 143(11) of the Act.

We conducted our audit of the Ind AS financial statements inaccordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the Ind AS financialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of materialmisstatement of the Ind AS financial statements, whether due tofraud or error. In making those risk assessments, the auditorconsiders internal financial control relevant to the Company’spreparation of the Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the

appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’sDirectors, as well as evaluating the overall presentation of the IndAS financial statements.

We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the IndAS financial statements.

Opinion

In our opinion and to the best of our information and according tothe explanations given to us, the aforesaid Ind AS financialstatements give the information required by the Act in the mannerso required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the IndAS, of the state of affairs (financial position) of the Company as at31st March, 2018, and its profit, financial performance includingother comprehensive income, its cash flows and the changes inequity for the year ended on that date.

Other Matters

The comparative financial information of the company for the yearended 31st March 2017 and the transition date opening balancesheet as at 1st April 2016 prepared in accordance with Ind ASincluded in these Ind AS financial statements have been audited bythe predecessor auditor who had audited the financial statementsfor the relevant periods. The report of the predecessor auditor onthe comparative financial information and the opening balance sheetdated 25th May 2017 expressed an unmodified opinion.

The comparative financial information of the Company for the yearended 31st March 2017 and the transition date opening balancesheet as at 1st April 2016 included in these Ind AS financialstatements, are based on the previously issued statutory financialstatements prepared in accordance with the Companies (AccountingStandards) Rules, 2006 audited by the predecessor auditor whosereport for the year ended 31st March 2017 and 31st March 2016dated 25th May 2017 and 26th May 2016 respectively expressedan unmodified opinion on those financial statements, as adjustedfor the differences in the accounting principles adopted by theCompany on transition to the Ind AS, which have been audited byus.

Our opinion on the Ind AS financial statements and our report ofOther Legal and Regulatory Requirements below is not modified inrespect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016(“the Order”) issued by the Central Government in terms ofSection 143(11) of the Act, we give in “Annexure A” a statementon the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our audit,we report, to the extent applicable that :

a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required bylaw have been kept by the Company so far as it appearsfrom our examination of those books.

c) The Balance Sheet, the Statement of Profit and Lossincluding Other comprehensive Income, the Cash FlowStatement and Statement of Changes in Equity dealt

24

Annual Report 2017-2018with by this Report are in agreement with the books ofaccount.

d) In our opinion, the aforesaid Ind AS financial statementscomply with the Indian Accounting Standards prescribedunder section 133 of the Act.

e) On the basis of the written representations receivedfrom the directors as on 31st March, 2018 taken on recordby the Board of Directors, none of the directors isdisqualified as on 31st March, 2018 from being appointedas a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and theoperating effectiveness of such controls, refer to ourseparate Report in “Annexure B”. Our report expressesan unmodified opinion on the adequacy and operatingeffectiveness of the Company’s internal financial controlsover financial reporting.

g) With respect to the other matters to be included in theAuditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in ouropinion and to the best of our information and accordingto the explanations given to us:

1. The Company has disclosed the impact of pendinglitigations on its financial position in its Ind ASfinancial statements

2. The Company did not have any long-term contractsincluding derivative contracts for which there wereany material foreseeable losses

3. there were no amounts which were required to betransferred to the Investor Education and ProtectionFund by the Company.

For, Shailesh Shah & AssociatesChartered Accountants

Firm Reg. No. 109877W

Shailesh A. ShahPlace : Ahmedabad ProprietorDate : 28th May, 2018 Membership No. 32205

Annexure – A to Independent Auditors’ Report

Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements’ section of our report of even date to themembers of MADHUSUDAN INDUSTRIES LIMITED on the IndAS financial statements as of and for the year ended 31st March,2018.

1. In respect of its fixed assets :

(a) The company has maintained proper records, showingfull particulars including quantitative details and situationof its fixed assets.

(b) As explained to us, fixed assets have been physicallyverified by the management at reasonable intervals in aphased periodical manner, which in our opinion isreasonable, having regard to the size of the Companyand the nature of its assets. No material discrepanciesbetween the book records and the physical inventoryhave been noticed in respect of the assets physicallyverified.

(c) The title deeds of immovable properties are held in thename of the company.

2. As explained to us, the company does not hold any physicalinventories during the year. Thus paragraph 3(ii) of the Orderis not applicable to the Company.

3. According to the information and explanations given to us andon the basis of our examination of the books of account, theCompany has not granted any loan, secured or unsecured,to companies, firms, Limited Liability Partnerships or otherparties covered in the register maintained under Section 189of the Companies Act, 2013.

4. According to the information and explanations given to us, thecompany has complied with the provisions of Section 185and 186, wherever appl icable, in respect of loans,investments, guarantees and securities given by the company.

5. In our opinion and according to the information andexplanations given to us, the Company has not accepted anydeposit from the public in accordance with the provisions ofSection 73 to 76 or any other relevant provisions of the Actand the rules framed there under. Accordingly, paragraph3(v) of the Order is not applicable to the Company.

6. In our opinion and according to the information andexplanations given to us, the company is not required tomaintain cost records specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act.

7. (a) According to the records of the company, undisputedstatutory dues including Provident Fund, Employees’State Insurance, Income-tax, Sales-tax, Service Tax,Duty of Customs, Duty of Excise, Value Added Tax,Goods and Service Tax, Cess and other statutory dueshave been generally regularly deposited with theappropriate authorities. According to the information andexplanations given to us, no undisputed amounts payablein respect of the aforesaid dues were outstanding as at31st of March, 2018 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given tous, following disputed statutory dues have not beendeposited on account of disputed matters pending beforeappropriate authorities are as under :Sr. Name of Nature of Forum where AmountNo. Statute Dues dispute is Rs. (In

pending Lacs)

1 Gujarat Sales Sales-tax Gujarat Sales 139.34Tax Act Tax Tribunal

2 Central Excise CentralAct Excise Duty CESTAT 97.76

8. The company does not have any loans or borrowings fromany financial institution, bank government or debenture holdersduring the year. Accordingly, paragraph 3(viii) of the order isnot applicable.

9. The Company has not raised any moneys by way of initialpublic offer, further public offer (including debt instruments)and term loans. Accordingly, the provisions of Clause 3(ix) ofthe Order are not applicable to the Company.

10. To the best of our knowledge and according to the informationand explanations given to us, no fraud by the Company andno fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

11. According to the information and explanations given to us, themanagerial remuneration has been paid or provided inaccordance with the requisite approval mandated by theprovisions of section 197 read with schedule V to theCompanies Act 2013.

25


12. The Company is not a Nidhi Company and the Nidhi Rules,2014 are not applicable to it, the provisions of clause 3 (xii) ofthe Order are not applicable to the Company.

13. According to the information and explanations given to us, alltransactions with the related parties are in compliance withSection 177 and 188 of the Act, where applicable and thedetails have been disclosed in the Financial Statements asrequired by the applicable Indian Accounting Standards.

14. According to the information and explanations given to us andbased on our examination of the records of the Company, theCompany has not made any preferential allotment or privateplacement of shares or fully or partly convertible debenturesduring the year. Accordingly, the provisions of Clause 3(xiv)of the Order are not applicable to the Company.

15. According to the information and explanations given to us andbased on our examination of the records of the Company, theCompany has not entered into any non-cash transactionswith directors or persons connected with him and henceprovisions of section 192 of the Companies Act, 2013 are notapplicable.

16. According to information and explanations given to us, theCompany is not required to be registered under Section 45-IAof the Reserve Bank of India Act, 1934. Accordingly, theprovisions of Clause 3(xvi) of the Order are not applicable tothe Company.


Firm Reg. No. 109877W

Shailesh A. ShahPlace : Ahmedabad ProprietorDate : 28th May, 2018 Membership No. 32205

Annexure – B to Independent Auditors’ Report

Referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements’ Section of our Report of even date to themembers of MADHUSUDAN INDUSTRIES LIMITED on the financialstatements for the year ended 31st March, 2018.

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act, 2013(“the Act”)We have audited the internal financial controls over financial reportingof MADHUSUDAN INDUSTRIES LIMITED (“the Company”) as ofMarch 31, 2018 in conjunction with our audit of the Ind AS financialstatements of the Company for the year ended on that date.Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing andmaintaining internal financial controls based on the internal controlover financial reporting criteria established by the Companyconsidering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of CharteredAccountants of India (the “Guidance Note”). These responsibilitiesinclude the design, implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuringthe orderly and efficient conduct of its business, including adherenceto company’s policies, the safeguarding of its assets, the preventionand detection of frauds and errors, the accuracy and completenessof the accounting records, and the timely preparation of reliablefinancial information, as required under the Companies Act, 2013.Auditors ResponsibilityOur responsibility is to express an opinion on the Company’s internalfinancial controls over financial reporting based on our audit. Weconducted our audit in accordance with the Guidance Note and theStandards on Auditing, issued by ICAI and deemed to be prescribedunder section 143(10) of the Companies Act, 2013, to the extent

applicable to an audit of internal financial controls, both applicableto and audit of Internal Financial Controls and, both issued by theInstitute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financialreporting was established and maintained and if such controlsoperated effectively in all material respects.Our audit involves performing procedures to obtain evidence aboutthe adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting, assessing the risk that amaterial weakness exists, and testing and evaluating the designand operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’sjudgement, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud orerror.We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on theCompany’s internal financial controls system over financial reporting.Meaning of Internal Financial Controls over FinancialReportingA Company’s internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generallyaccepted accounting principles. A company’s internal financialcontrol over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, inreasonable details, accurately and fairly reflect the transactionsand dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance withgenerally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordancewith authorities of management and directors of the company; and(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financialstatements.Inherent Limitations of Internal Financial Controls OverFinancial ReportingBecause of the inherent limitations of internal financial controls overfinancial reporting, including the possibility of collusion or impropermanagement override of controls, material misstatements due toerror or fraud may occur and not be detected. Also, projections ofany evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate becauseof changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.OpinionIn our opinion, the Company has, in all material respects, anadequate internal financial controls system over financial reportingand such internal financial controls over financial reporting wereoperating effectively as at March 31, 2018, based on the internalcontrol stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute ofChartered Accountants of India.


Firm Reg. No. 109877WShailesh A. Shah

Place : Ahmedabad ProprietorDate : 28th May, 2018 Membership No. 32205

26


Balance Sheet as at 31st March, 2018

Particulars Note No. As at 31st As at 31st As at 01st

March, 2018 March, 2017 April, 2016Rs. Rs. Rs.

ASSETS(A) Non-current assets:

(1) Property, Plant and Equipment 2 23,574,134 25,018,082 28,363,339(2) Financial Assets

(a) Investments 3 67,715,140 61,127,763 39,200,989(b) Others Financial Assets 4 907,193 952,727 938,813

(3) Other non-current assets 5 3,074,778 3,074,778 3,074,778

(B) Current assets(1) Financial Assets

(a) Investments 6 41,155,358 35,219,483 24,217,581(b) Trade receivables 7 1,415 4,596,909 10,970,912(c) Cash and cash equivalents 8 6,211,418 1,035,079 8,636,088(d) Bank balances other than (c) above 9 32,050,684 32,605,180 21,154,480(e) Loans 10 19,228,460 17,715,871 16,785,865

(2) Current Tax Assets (Net) 11 2,358,602 1,638,610 4,332,107(3) Other current assets 12 2,666,200 3,040,730 2,470,243

TOTAL ASSETS 198,943,382 186,025,212 160,145,195

EQUITY AND LIABILITIES(A) EQUITY

(1) Equity Share capital 13 26,875,000 26,875,000 26,875,000(2) Other Equity 14 156,613,905 146,076,477 125,156,473

(B) LIABILITIES(1) Non-current liabilities

(a) Financial LiabilitiesOther financial liabilities 15 2,091,300 2,091,300 1,946,000(other than those specified in item (b), to be specified)

(b) Provisions 16 120,022 117,101 106,848(c) Deferred tax liabilities (Net) 17 11,414,997 8,939,726 2,649,674

(2) Current liabilities(a) Financial Liabilities - - -(b) Other current liabilities 18 208,412 57,909 261,865(c) Provisions 19 1,619,746 1,867,699 3,149,335

TOTAL EQUITY AND LIABILITIES 198,943,382 186,025,212 160,145,195

Summary of significant accounting policies 1

The accompanying notes are an integral part of the financial statements.

As per our report of even date attachedFor and on behalf ofShailesh Shah & AssociatesChartered AccountantsFirm Registration No. 109877WShailesh A ShahProprietorMembership No. 32205

Place : AhmedabadDate : 28th May, 2018

Rajesh B. Shah Director

Sanwarmal D. Agarwal Director

P. C. Surana Director

P. K. Shashidharan Director

Rutva Acharya Director


Tarun PanchalC.F.O.

Dipshika KhatriCompany Secretary

27


Statement of Profit and Loss for the year ended 31st March, 2018

Particulars Note No. For the year ended For the year ended31st March, 2018 31st March, 2017

Rs. Rs.

Incomes

Revenue From Operations 20 10,953,762 10,614,762

Other Income 21 15,554,522 31,848,751

Total Income 26,508,284 42,463,513

Expenses

Employee benefits expense 22 4,286,883 4,056,774

Finance costs - -

Depreciation and amortization expense 2 1,430,560 1,852,248

Other expenses 23 6,838,223 8,783,753

Total expenses 12,555,666 14,692,775

Profit/(loss) before exceptional items and tax 13,952,618 27,770,738

Tax expense:

Current tax 785,000 350,000

Deferred tax 2,515,163 6,344,303

Profit/(loss) for the period 10,652,455 21,076,435

Other Comprehensive Income

A (i) Items that will not be reclassified to profit or loss (154,919) (210,682)

(ii) Income tax relating to items that will not be reclassified to profit or loss 39,892 54,251

B (i) Items that will be reclassified to profit or loss - -

(ii) Income tax relating to items that will be reclassified to profit or loss - -

Total Comprehensive Income for the period 10,537,428 20,920,004

Earnings per equity share

(1) Basic 1.98 3.92

(2) Diluted 1.98 3.92

See accompanying notes to the financial statements










Tarun PanchalC.F.O.


28


Statement for changes in Equity for the period ended on 31st March, 2018

A. Equity Share Capital

Particulars No. of Shares Amount (Rs.)

Balance at the beginning of the reporting period 5,375,000 26,875,000

Changes in equity share capital during the year - -

Balance at the end of the reporting period 5,375,000 26,875,000

B. Other Equity

Particulars Reserves and Surplus Other Total OtherGeneral Retained Comprehensive Equity

Reserves Earnings IncomeRs. Rs. Rs. Rs.

Balance as on 1st April, 2016 171,130,705 (45,974,232) - 125,156,473

Profit for the year - 21,076,435 - 21,076,435

Remesurement of Defined Benefit Plan - - (156,431) (156,431)

Balance as on 31st March, 2017 171,130,705 (24,897,797) (156,431) 146,076,477

Profit for the year - 10,652,455 - 10,652,455

Remesurement of Defined Benefit Plan - - (115,027) (115,027)

Balance as on 31st March, 2018 171,130,705 (14,245,342) (271,458) 156,613,905









Tarun PanchalC.F.O.


29


Cash Flow Statement for the year ended 31st March, 2018

Year ended 31st March, 2018 Year ended 31st March, 2017Particulars Rs. Rs. Rs. Rs.

A. Cash flow from operating activitiesProfit before tax 13,952,618 27,770,738Adjusted for- Depreciation and amortisation expense 1,430,560 1,852,248- Interest Charged - -- Interest Income (4,160,924) (4,493,445)- Dividend Income (318,289) (440,839)- Amount Written Off 4,559,502 5,681,331- Profit on Sale of Investments (792,840) (551,306)- Premium Expenses on Securities 68,706 17,273- Net Gain arising on Financial Assets measured at

Fair Value through Profit and Loss (FVTPL) (10,272,915) (25,269,587)- Provision for Impairment in Value of Investment 143,509 914,215- (Profit) / Loss on Sale of Property, Plant & Equipment (Net) (2,612) 61,259

(9,345,303) (22,228,851)

Operating profit before working capital changes 4,607,315 5,541,887

Adjusted for changes in working capital- Trade Receivable 35,992 692,671- Financial Assets (912,559) (12,394,620)- Inventories - -- Other Assets 374,530 (570,487)- Trade and Other Payables - -- Other Liabilities (4,415) (269,338)- Provisions (245,032) (1,271,383)

(751,484) (13,813,157)

Cash generated from Operating Activities 3,855,831 (8,271,270)Direct taxes paid (Net of Refund) (1,504,992) 2,343,497

Net Cash From Operating Activities 2,350,839 (5,927,773)

B. Cash flow from Investing activitiesPurchase of Property, Plant & Equipment - (33,250)Sale of Property, Plant & Equipment 16,000 1,465,000Purchase of Non-Currrent Investments (270,430) -Sale of Non-Current Investments 2,000,000 -Purchase of Current Investments (14,494,776) (22,668,516)Sale of Current Investments 11,095,493 14,629,246Interest received 4,160,924 4,493,445Dividend received 318,289 440,839

Net Cash Used in Investing Activities 2,825,500 (1,673,236)

C. Cash flow from financing activities

Proceeds from Non-Current borrowings / Repayment of Loan - -

Interest paid - -

Net Cash Used in Financing Activities - -

Net Changes in Cash & Cash Equivalents (A+B+C) 5,176,339 (7,601,009)

Cash & Cash Equivalents - Opening Balance 1,035,079 8,636,088

Cash & Cash Equivalents - Closing Balance 6,211,418 1,035,079









Tarun PanchalC.F.O.


30

Annual Report 2017-2018Significant Accounting Policies and other Explanatory Information to the Financial Statements for the Financial Year ended31st March, 2018

1. Corporate Information

MADHUSUDAN INDUSTRIES LIMITED (the “Company”) is a public limited company domiciled in India having its registered officesituated at Survey No. 359 / B, 359 / C, 361 & 362, Rakhial, Pin 382 315, Taluka Dehgam, Dist. Gandhinagar, India. The Companywas incorporated on 27th August 1945, under the provisions of the Companies Act, 1918 of Baroda State applicable in India and itsequity shares are listed on the BSE Limited. The Company is engaged presently in the business of Leasing of properties.

2. Basis of Preparation of Financial Statements

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical costconvention method on accrual basis except for certain financial instruments which are measured at fair values. The Ind AS areprescribed under Section 133 of the Companies Act, 2013 (Àct) read with Rule 3 of the Companies (Indian Accounting Standards)Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules 2016.

The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 First-TimeAdoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted inIndia as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP orIGAAP). Reconciliations and descriptions of the effect of the transition has been summarised in Note 31.

3. Use of Estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments andassumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amountsof assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reportedamounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual resultscould differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes incircumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in whichchanges are made and, if material, their effects are disclosed in the notes to the financial statements.

4. Significant Accounting Policies

A. Revenue Recognition

Revenue is recognized on a fair value basis to the extent that it is probable that the economic benefits will flow to the Companyand the revenue can be reliably measured.

Rendering of Services

Revenue from services are recognized as they are rendered based on arrangements with the customers.

Interest Income

For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR),which is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financialinstrument or a shorter period, where appropriate, to the net carrying amount of the financial asset.

Dividend Income

Dividend income is recognized when the Company’s right to receive such dividend is established.

B. Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directlyattributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or whenno future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognized of the asset isincluded in the Statement of Profit or Loss when the asset is derecognized.

For transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipmentrecognized as on 1st April 2016 measured as per previous GAAP as it deemed cost on the date of transition.

Depreciation is calculated on cost of items of property, plant and equipment (other than freehold land) less their estimatedresidual values over their estimated useful lives using the straight-line method for plant & Machinery and written down valuemethod for all other property, plant and equipment and is generally recognized in the statement of profit and loss.

Useful lives have been determined in accordance with Schedule II to the Companies Act, 2013. The residual values are notmore than 5% of the original cost of the asset.

The residual values, useful lives and methods of amortization of intangible assets are reviewed at each financial year andadjusted prospectively, if appropriate.

C. Intangible Assets

Intangible assets are stated at acquisition cost and other cost incurred, which is attributable to preparing the asset for itsintended use, less accumulated amortization and accumulated impairment losses, if any. Intangible assets (ComputerSoftware) with finite lives are amortised over the useful economic life (not exceeding five years) and assessed for impairmentwhenever there is an indication that the intangible asset may be impaired.

31


An item of intangible assets is derecognized upon disposal or when no future economic benefits are expected from its use ordisposal. Any gain or loss arising on recognition of the asset is included in the Statement of Profit or Loss when the asset isderecognized.

The residual values, useful lives and methods of amortization of intangible assets are reviewed at each financial year andadjusted prospectively, if appropriate.

D. Leases

Leases where significant portion of risk and reward of ownership are retained by the lessor, are classified as operating leasesand lease payments are recognized as an expense on a straight line basis in Statement of Profit and Loss over the leaseterm.

Finance leases that transfer substantially all of the risks and benefits incidental to ownership of the leased item, arecapitalized at commencement of the lease at the fair value of the leased property or, if lower, at the present value of theminimum lease liability so as to achieve a constant rate of interest on the remaining balance of liability. Finance charges arerecognized in finance cost in the statement of profit and loss.

E. Current versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset istreated as current when it is:

· Expected to be realised or intended to be sold or consumed in normal operating cycle

· Held primarily for the purpose of trading

· Expected to be realised within twelve months after the reporting period, or

· Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve monthsafter the reporting period

All other assets are classified as non-current.

A Liability is current when:

· Expected to be settled in normal operating cycle

· Held primarily for the purpose of trading

· Due to be settled within twelve months after the reporting period, or

· There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalent.The Company has identified twelve months as its operating cycle.

F. Measurement of Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between marketparticipants at the measurement date. The fair value measurement is based in the presumption that the transaction to sell the assetor transfer to liability takes place either :

· In the principal market for the asset or liability or

· In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumption that market participants would use when pricing theasset or liability, assuming that market participants act in their economic interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economicbenefits by using the asset in its highest and best use or by selling it to another market participant that would use the assetin its highest and best use.

The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are availableto measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fairvalue hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as awhole :

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly orindirectly observable

Level 3 – input for the asset or liability that are not based on observable market data (unobservable inputs).

32

Annual Report 2017-2018G. Financial Instruments

I. Initial Recognition and Measurement

The company recognizes financial assets and liabilities when it becomes a party to the contractual provisions of theinstrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivableswhich are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition orissue of financial assets and liabilities that are not at fair value through profit or loss are added to the fair value on initialrecognition. Regular way purchase and sale of financial assets are recognized on the trade date.

II. Subsequent Measurement

A. Non-Derivative Financial instruments

a. Financial Assets Carried at Amortised Cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whoseobjective is to hold the asset in order to collect contractual cash flows and the contractual terms of thefinancial asset give rise on specified dates to cash flows that are solely payments of principal and interest onthe principal amount outstanding.

b. Financial Assets at Fair Value Through Other Comprehensive Income

A financial asset is subsequently measured at fair value through other comprehensive income if it is heldwithin a business model whose objective is achieved by both collecting contractual cash flows and sellingfinancial assets and the contractual terms of the financial asset give rise on specified dates to cash flows thatare solely payments or principal and interest on the principal amount outstanding.

c. Financial Assets at Fair Value Through Profit or Loss

A financial asset which is not classified in any of the above categories are subsequently fair valued throughprofit and loss.

The company has made an irrevocable election for its Non-current and Current investments which areclassified as equity instruments to present the subsequent changes in fair value in statement of profit andloss on its business model. Further in cases where the Company has made an irrevocable election basedon its business model, for its investments which are classified as equity instruments, the subsequentchanges in fair value are recognized in statement of profit and loss account.

d. Financial Liabilities

Financial liabilities are subsequently carried at amortised cost using the effective interest method. For tradeand other payables maturing within one year from the balance sheet date, the carrying amounts approximatefair value due to the short maturity of these instruments.

III. Derecognition of Financial instruments

The company derecognizes a financial asset when the contractual right to receive the cash flows from the financialasset expire or it transfers the financial asset.

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.

H. Foreign Currency

· Functional Currency

Financial statements of the Company’s are presented in Indian Rupees, which is also the functional currency.

· Transactions and Translations

Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchangerates in effect at the balance sheet date. The gains or losses resulting from such translations are included in the Statementof Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fairvalue are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assetsand non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchangerate prevalent at the date of the transaction. Transaction gain or losses realized upon settlement of foreign currencytransactions are included in determining net profit for the period in which the transaction is settled.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit andloss, within finance costs. All other foreign exchange gain and losses are presented in the statement of profit and loss on netbasis within other gains / (losses).

I. Borrowing Costs

Borrowing costs, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantialperiod of time to get ready for its intended use, are capitalized as part of the cost of the respective asset. All other borrowing costsare charged in the period, in which they occur in the statement of profit and loss.

J. Employee Benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for theperiod in which the related service is rendered.

33


Post-employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for theperiod in which the employee has rendered services. The expense is recognized at the present value of the amounts payabledetermined using actuarial valuation techniques. Gains and losses through re-measurements of the net defined benefit liability /(assets) are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yieldscomputed by applying the discount rate used to measure the defined benefit obligation is recognized on other comprehensiveincome. The effects of any plan amendments are recognized in the statement of profit and loss.

K. Income Tax

Income tax comprises current and deferred income tax. It is recognized in profit or loss except to the extent that it relates to itemsrecognized directly in equity, in which case it is recognized in other comprehensive income.

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act,1961.

Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets andliabilities and their carrying amounts in the financial statements. Deferred income tax assets and liabilities are measured using taxrates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxableincome in the year in which those temporary differences are expected to be recovered or settled. The effect of changes in taxrates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactmentor the substantive enactment date. A deferred income tax asset is recognized to the extent these is reasonable certainty thatfuture taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Thecompany offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognizedamounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

L. Earning Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity Share holders of theCompany by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity Shareholders ofthe Company and the weighted average number of shares outstanding during the period, are adjusted for the effects of all dilutivepotential equity shares.

M. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that isreasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions aredetermined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the timevalue of money and the risks specific to the liability. These are reviewed at each Balance Sheet date and adjusted to reflect thecurrent best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the financial statements. Acontingent asset is neither recognized nor disclosed if inflow of economic benefit is probable.

N. Impairment

I. Financial Assets

The Company recognizes loss allowance using the expected credit losses (ECL) model for the financial assets which are notfair valued through statement of profit and loss. Loss allowance for trade receivables with no significant financing componentis measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at anamount equal to the 12 month ECL, unless there has been a significant increase in credit risk from initial recognition in whichcase those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust theloss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain orloss in statement of profit and loss.

II. Non-Financial Assets

Intangible Assets and Property, Plant and Equipment

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes incircumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, therecoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual assetbasis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases,the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measuredby the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. Animpairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determinethe recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that thisamount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation ordepreciation) had no impairment loss been recognized for the asset in prior years.

O. Cash Flow Statement

Cash flows are reported using the indirect method whereby the profit before tax is adjusted for the effect of the transactions of anon cash nature, any deferral or accruals of past and future operating cash receipts or payments and items or income or expenseassociated with investing or financing cash flows. The cash flows from operating, investing and financial activities of the Companyare segregated.

34


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35


Particulars As at 31st As at 31st As at 1st

March 2018 March 2017 April 2016Rs. Rs. Rs.

3 INVESTMENTSNon- Current InvestmentsQuoted Equity Instruments 65,495,408 56,849,128 34,914,956Quoted Preference Shares - - -Unquoted Equity Instruments 23,800 23,800 23,800Unquoted Mutual Funds 145,336 135,533 125,658Unquoted Debentures & Bonds 2,018,596 4,087,302 4,104,575Unquoted Government Securities 32,000 32,000 32,000

Current Investments

Mutual Funds - - -

Total Investments 67,715,140 61,127,763 39,200,989

Market Value of Quoted Investments 69,194,474 60,404,685 37,556,298

Aggregate amount of Unquoted Investments 2,221,732 4,280,635 4,288,033

Aggregate amount of Quoted Investments 65,495,408 56,849,128 34,914,956

Aggregate Amount of Impairment in Value of Investments 3,701,066 3,557,557 2,643,342

Non-Current Investments

Quoted Equity Instruments

Carried at Fair Value through Other Comprehensive IncomeIn fully paid Equity Shares of Rs. 10/- each

As at As at As at31.03.2018 31.03.2017 01.04.2016

- 37 37 Aditya Birla Nuvo Ltd - 56,316 30,516192 192 192 Aditya Birla Fashion 28,906 29,530 27,590

77 - - Aditya Birla Capital 11,230 - -1,000 1,000 1,000 Clutch Auto Ltd - - -

300 300 300 Dynamatic Forgings India Ltd - - -100 100 100 Eicher Motors Ltd 2,833,695 2,555,415 1,913,985322 322 322 Essar Steels Ltd - - -

69 69 69 Eurotex Ltd 2,298 2,463 1,58710 10 10 Euro Ceramics Ltd 53 68 30

200 200 200 Gujarat Refactories Ltd - - -50 50 50 Hanuman Tea Co Ltd - - -

400 400 400 I G Petro Ltd 256,680 150,180 41,200200 200 200 Lan Esseda Software Systems Ltd - - -

10 10 10 Nitco Ltd 925 584 391300 300 300 Orkey Silk Mills Ltd - - -100 100 100 Orient Bell Ltd 27,440 17,310 14,550670 670 670 Premier Ind. (India) Ltd - - -

1,572 1,072 1,072 Reliance Industries Ltd 1,387,762 1,414,182 1,120,5081,700 1,700 1,700 SREI Infrastructure Finance Ltd 125,120 141,185 93,925

36 36 36 Ultra Tech Cement Ltd 142,123 143,638 116,1721,000 1,000 1,000 Unicorn Organics Ltd - - -

200 200 200 Western India Sugar & Chem Ltd - - -200 200 200 XLO Machine Ltd - - -145 145 145 Tata Communications Ltd 90,067 104,733 55,238400 400 400 Melstar Information Tech Ltd - 1,532 2,276

1,112 1,112 1,112 Entegra Ltd - 2,246 3,981150 150 150 MW Unitex Ltd - - 358

4,906,299 4,619,382 3,422,307

In fully paid Equity Shares of Rs. 5/- each18,065 18,065 18,065 Cera Sanitaryware Ltd 62,240,248 54,431,652 33,230,568

300 300 300 Shree Rama Multi-Tech Ltd 3,357 3,750 1,773

62,243,605 54,435,402 33,232,341

36

Annual Report 2017-2018Particulars As at 31st As at 31st As at 1st


As at As at As at31.03.2018 31.03.2017 01.04.2016

In fully paid Equity Shares of Rs. 2/- each405 270 270 Larsen & Toubro Ltd 531,319 425,952 328,374415 415 415 HSIL Limited 154,048 145,437 115,474

- 10 10 Kajaria Ceramics Ltd - 5,848 9,529500 500 500 Somany Ceramics Ltd 335,450 344,000 196,550

1,000 1,000 1,000 West Coast Paper Mills Ltd 239,400 175,300 68,95055 - - Grasim Ltd 57,975 - -

1,400 - - Radico Khaitan Ltd. 463,540 - -2,500 2,500 2,500 Dairy Den Ltd - - -

1,781,732 1,096,537 718,877

In fully paid Equity Shares of Re. 1/- each2,000 2,000 2,000 Electro Steel & Casting Ltd 48,800 69,100 37,800

86 86 86 Zee Entertainment Enterprises Ltd 49,562 45,980 33,23020 20 20 Siticable Network Ltd 300 760 70418 18 18 Zee News Ltd 688 637 3315 - - Diligent Media Corporation Ltd - - -

23 23 23 Dish TV India Ltd 1,636 2,482 1,99611 11 11 Zee Learn Ltd 386 530 33720 - - Kajaria Ceramics Ltd 11,341 - -

112,713 119,489 74,398

Other Investments - Indian Depository Receipt2,500 2,500 2,500 Standard Chartered PLC 150,125 133,875 108,375

Less: Impairment of Investments (3,699,066) (3,555,557) (2,641,342)

65,495,408 56,849,128 34,914,956

Quoted Preference Shares In fully paid Preference Shares of Re. 1/- each

0 1,806 1,806 Zee Entertainment Enterprises Ltd - - -

In fully paid Preference Shares of Rs. 10/- each180 - Zee Entertainment Enterprises Ltd - - -

- - -

Unquoted Equity Instruments In fully paid Equity Shares of Rs. 10/- each (Unquoted)

2380 2380 2380 Alipore Terrace Maintenance Pvt. Ltd 23,800 23,800 23,800

23,800 23,800 23,800

Unquoted Mutual Funds In Units of Mutual Funds of Rs. 10/- each

700 700 700 UTI Equity Fund 68,459 62,954 54,9201,200 1,200 1,200 UTI Bluchip Flexicap Fund 30,824 26,406 27,7511,427 1,427 1,427 UTI Master Share Fund 46,053 46,173 42,987

145,336 135,533 125,658

Unquoted Debentures & Bonds In Fully paid Non - Convertible Debentures

40 40 40 Western India Sugar & Chem Ltdof Rs. 50/- each 2,000 2,000 2,000

2,000 2,000 2,000

In Bonds4 4 4 10.90% Tata Motors Finance - 2020 2,018,596 2,028,896 2,039,1960 2 2 11.69% Tata Teleservices - 2025 - 2,058,406 2,065,379

2,018,596 4,087,302 4,104,575 Less: Impairment of Investments (2,000) (2,000) (2,000)

2,018,596 4,087,302 4,104,575

Unquoted Government Securities (Deposited with Government Departments) National Savings Certificates 32,000 32,000 32,000

32,000 32,000 32,000

37




4 OTHER FINANCIAL ASSETS(Unsecured and Considered Good)Security Deposits 907,193 952,727 938,813

Total 907,193 952,727 938,8135 OTHER NON-CURRENT ASSETS

Taxes and duties recoverable 3,074,778 3,074,778 3,074,778

Total 3,074,778 3,074,778 3,074,7786 CURRENT INVESTMENTS

Unquoted Mutual FundsMutual Funds (Units of Rs. 10/- each, unless otherwise specified)

As at As at As at31.03.2018 31.03.2017 01.04.2016

136,699.904 136,699.904 - L & T Income Opportunities Fund - Growth 2,721,340 2,551,709 -802.674 1,180.292 377.618 Franklin India Short Term Income Plan-Growth 2,946,022 3,996,613 1,150,723

- 46,744.262 46,744.262 Kotak Select Focus Fund - Growth - 1,343,524 1,035,946- 9,901.088 9,901.088 HDFC Balanced Fund - Growth - 1,297,716 1,052,842

1.687 1.687 1.687 LIC Mutual Fund Floater MIP Fund - Quarterly Plan 18 18 18- 0.022 0.022 LIC Nomura Mutual Fund MIP -

Quarterly Dividend Plan - - -- 8,852.318 8,046.140 HDFC Equity Fund - Dividend - 451,955 346,089- 14,425.985 13,060.922 HDFC Growth Fund - Dividend - 426,461 335,235

458,609.754 458,609.754 80,534.102 ICICI Prudential Reg. Saving Fund-Growth 8,518,722 7,965,822 1,271,617- 2,674.584 6,459.001 Birla Sunlife Floating Rate Fund Short

Term Plan -Daily Dividend Reinvestment - 267,512 646,2711,183.339 1,183.339 1,183.339 SBI SHF Ultra Short Term Fund-Retail

Plan-Growth (Units of Rs. 1000/- each) 2,652,798 2,485,559 2,304,229119,535.723 119,535.723 - Kotak Income Opportunities Fund -

Growth (Regular Plan) 2,286,157 2,144,961 -- 3,541.040 3,541.040 Franklin India Prima Plus -Growth - 1,843,313 1,530,536

54,078.070 50,614.934 48,748.179 Reliance Arbitrage Advantage Fund-Div. Reinvestment 651,852 613,919 577,115

103,386.299 103,386.299 - Reliance Corporate Bond Fund-Growth Plan 1,448,762 1,361,163 -- 50,308.222 - Birla Sunlife Dynamic Bond Fund -Growth-

Regular Plan - 1,460,644 -121,741.169 121,741.169 - Reliance Reg. Saving Fund-Debt Plan-Growth 2,947,074 2,758,253 -37,215.443 37,215.443 - Birla Sunlife Short Term Fund -

Growth-Regular Plan 2,471,511 2,317,473 -- 140,000.000140,000.000 DSP Black Rock Dynamic Assets Allocation Fund - 1,932,868 1,676,192

1,691.817 - - Aditya Birla Sunlife Cash Management-Growth-Regular-Plan 706,426 - -

6,358.852 - - Aditya Birla Sun Life Balanced ’95 Fund-Growth -Regular Plan 4,686,092 - -

109,179.742 - - Motilal Oswal Most Ultra Short TermBond Fund-Regular Growth 1,465,116 - -

177,877.389 - - IDFC Balanced Fund Regular Plan-Growth 2,004,322 - -83,289.579 - - Motilal Oswal Most Focused Multicap

35 Fund-Regular Growth 2,190,807 - -570.8028 - - Kotak Liquid Regular Plan Growth 2,005,167 - -800.769 - - Mirae Asset Cash Management Fund-

Regular Growth Plan 1,453,172 - -- - 6594.031 Tata Balance Fund - Regular Plan - Growth - - 1,078,945- - 13804.871 UTI Mid Cap Fund - Growth - - 1,043,981- - 111554.608 Kotak Equity Arbitrage Fund -

Bimonthly Dividend - Regulat Plan - - 2,227,221- - 94694.280 JP Morgan India Equity Income Fund -

Regular Plan - Growth - - 1,027,215- - 3647.839 Birla Sunlife MNC Fund-Growth-Regular Plan - - 2,046,365- - 415553.098 ICICI Prudential Income-Regular Plan-QD - - 4,867,041

Total 41,155,358 35,219,483 24,217,581

Aggregate amount of quoted investments 41,155,358 35,219,483 24,217,581

Market Value of quoted investments 41,155,358 35,219,483 24,217,581

38



7 TRADE RECEIVABLESConsidered Good 1,415 4,596,909 10,970,912Considered Doubtful - - -

1,415 4,596,909 10,970,912Less : Allowance for Doubtful Debts - - -

Total 1,415 4,596,909 10,970,912

8 CASH AND CASH EQUIVALENTSBalance with banks- On current accounts 4,582,284 992,000 1,623,850- Deposits accounts (Original maturity upto 3 months) 1,600,568 - 6,979,024

6,182,852 992,000 8,602,874Cash on Hand 28,566 43,079 33,214

Total 6,211,418 1,035,079 8,636,088

9 BANK BALANCES OTHER THAN ABOVEDeposits with remaining matuirty for less than 12 Months 32,050,684 32,605,180 21,154,480

Total 32,050,684 32,605,180 21,154,480

10 LOANS(Unsecured and considered good, unless otherwise stated)CurrentInter Corporate Deposits 19,228,460 17,715,871 16,785,865

Total 19,228,460 17,715,871 16,785,865

11 CURRENT TAX ASSETS (NET)Advance Income Tax (including for earlier years) 8,787,975 7,282,983 9,710,089Less : Provision for Taxation (6,429,373) (5,644,373) (5,377,982)Advance Income Tax (Net of Provisions for tax) - - -

Total 2,358,602 1,638,610 4,332,107

12 OTHER CURRENT ASSETS(Unsecured and Considered Good)Interest Accrued on Fixed Deposits & Advances 1,850,621 2,270,642 1,736,029Balances with Excise Authorities 162,210 162,210 162,210Others Advances* 653,369 607,878 572,004

Total 2,666,200 3,040,730 2,470,243

*Other Advances includes Prepaid Expenses etc.

13 EQUITY SHARE CAPITALA Authorised

2,60,00,000 (2,60,00,000) Equity Shares of Rs. 5/- each 130,000,000 130,000,000 130,000,000

Issued, Subscribed and Paid Up53,75,000 (53,75,000) Equity Shares of Rs. 5/- each fully paid 26,875,000 26,875,000 26,875,000

Total 26,875,000 26,875,000 26,875,000

39


B Reconciliation of the equity shares outstanding at the beginning and at the end of the reporting year

Equity Shares As at 31st As at 31st As at 1st

March 2018 March 2017 April 2016No. of Shares No. of Shares No. of Shares

Shares Outstanding at the beginning of the year 5,375,000 5,375,000 5,375,000Add: Shares Issued during the year - - -

Shares Outstanding at the end of the year 5,375,000 5,375,000 5,375,000

C The company has only one class of equity shares havings a par value of Rs. 5/- per share. Each shareholder is eligible for onevote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in case ofinterim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company,after distribution of all preferential amounts, in proportion of their shareholding. The Company declares and pays dividends inIndian Rupees.

D The company has neither issued any shares nor bought back during the year.

E Details of shareholders holding more than 5% of the shares in the Company

Name of the Shareholder As at 31st March 2018 As at 31st March 2017 As at 1st April 2016

No. of % of No. of % of No. of % ofShares Holding Shares Holding Shares Holding

1 Vikram Investment Company Limited 936,640 17.43 936,640 17.43 936,640 17.432 Madhusudan Holdings Ltd. 440,600 8.20 440,600 8.20 440,600 8.203 Smt. Smiti Somany 613,120 11.41 613,120 11.41 613,120 11.414 Shri Vikram Somany 510,544 9.50 458,264 8.53 458,264 8.53



14 OTHER EQUITYGeneral ReserveBalance as at the beginning of the Year 171,130,705 171,130,705 171,130,705Less: Transfer to Depreciation Fund - - -

Balance as at end of the year 171,130,705 171,130,705 171,130,705

Surplus in the statement of Profit and LossBalance as at the beginning of the Year (24,897,797) (45,974,232) (67,434,908)Add: Net Profit for the Year 10,652,455 21,076,435 2,607,776Add: Adjustment as per Ind ASFair Value of Investment - - 20,485,712Less: Deferred Tax Liabilities created as per Fair -Value of Investments - - (1,632,812)

Balance as at end of the year (14,245,342) (24,897,797) (45,974,232)

Other Comprehensive IncomeRemeasurement of Defined Benefit PlansBalance as at the beginning of the year (156,431) - -Add: Adjustments during the year (115,027) (156,431) -

(271,458) (156,431) -

Total 156,613,905 146,076,477 125,156,473

Nature and purpose of other reservesGeneral ReserveGeneral reserve is credited out of profits earned by the Company by way of transer from surplus in the statement of profit and loss.The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General reserve us credited bytransfer of one component of equity to another and is not an item of other comprehensive income, items included in the General reservewill not be consequently reclassifed to statement of profit and loss.

15 OTHER NON CURRENT FINANCIAL LIABILITIESDeposits from Tenant 2,091,300 2,091,300 1,946,000

Total 2,091,300 2,091,300 1,946,000

16 NON-CURRENT PROVISIONSProvisions for Employee Benefits 120,022 117,101 106,848

Total 120,022 117,101 106,848

40



17 DEFERRED TAX LIABILITYDeferred Tax LiabilitiesFair Value of Current Investment 13,777,512 11,617,468 5,275,071

13,777,512 11,617,468 5,275,071Deferred Tax AssetsImpact of difference between Tax Depreciation andDepreciation / amortization charged for financial reporting 753,756 843,582 846,991Leave Encashment 94,143 54,251 -Others 1,514,616 1,779,909 1,778,406

2,362,515 2,677,742 2,625,397

Total 11,414,997 8,939,726 2,649,674

18 OTHER CURRENT LIABILITIESStatutory Dues 208,412 57,909 52485.00Deposit from Dealers, Agents - - 91000.00Advance from Customers - - 118380.00

Total 208,412 57,909 261,865

19 PROVISIONSProvisions for Employee Benefits 372,405 411,954 333,732Other Provisions* 1,247,341 1,455,745 2,815,603

Total 1,619,746 1,867,699 3,149,335

*Other Provisions includes provisions for various expenses.

Particulars Year ended Year ended31st March 2018 31st March 2017

Rs. Rs.

20 REVENUE FROM OPERATIONSOther Operating RevenuesRent Received 9,790,056 9,505,626Administrative & Maintenance Charges 1,163,706 1,109,136

Total 10,953,762 10,614,762

21 OTHER INCOMEInterest Income on financial assets carried at amortised cost 4,160,924 4,493,445Dividend IncomeNon Current Investment designated at fair value through profit or loss 270,468 202,323Current Investment designated at fair value through profit or loss 47,821 238,516

318,289 440,839Non-Current Investments designated at Fair Value through Profit or Loss 8,529,162 22,858,262Current Investment Designated at Fair Value through Pofit or Loss 1,743,753 2,411,325Profit on Sale of Current Investment 792,840 551,306Profit on Sale / Discard of Property Plant & Equipment (Net) 2,612 -Miscellaneous Incomes 1,002 -Item pertaining to Previous year, unspent liabilities & provisions no longer 5,940 1,093,574required written back(Net)

Total 15,554,522 31,848,751

22 EMPLOYEE BENEFITS EXPENSESSalaries, Wages and Bonus 2,733,059 2,520,061Contribution to Provident and Other funds 240,461 344,095Staff and Labour Welfare Expenses 1,313,363 1,192,618

Total 4,286,883 4,056,774

41


Particulars Year ended Year ended31st March 2018 31st March 2017

Rs. Rs.

23 OTHER EXPENSESStores, Spare Parts and Packing Materials - -Power, Fuel and Electricity Expenses 59,012 41,081Rent 1,000 1,000Repairs - Building 9,790 10,280Repairs - Plant & Machinery 5,500 -Repairs - Others 13,646 20,661Payments to Auditors- For Audit Fees 30,000 34,500Insurance 78,305 81,107Rates and Taxes 129,213 125,542Legal & Professional Expenses 646,673 509,337Vehicle Expenses 142,263 251,375Miscelleneous Expenses 648,690 748,279Loss on Sale of Property, Plant & Equipments - 61,259Directors Sitting Fees 46,000 38,000Impairment in Value of Investment 143,509 914,215Amount Written off (Net) 4,559,502 5,681,331Listing Fees 325,120 265,786

Total 6,838,223 8,783,753

As at 31st As at 31st

March 2018 March 2017Rs. Rs.

24 PAYMENT TO THE AUDITORSa Audit Fees 30,000 34,500b Taxation matters - 74,676

Total 30,000 109,176

25 EARNINGS PER SHARE

BASIC & DILUTEDProfit attributable to Equity Shareholders 10,652,455 21,076,435Weighted average Number of Equity Shares 5,375,000 5,375,000Basic and Diluted EPS 1.98 3.92Face Value per Share 5.00 5.00

26 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)Contingent LiabilitiesA Claims against the company / disputed liabilities not acknowledged as debts

Central Excise 13,933,964 13,933,964Sales Tax 9,775,503 9,775,503Commercial and Other Claims 54,772 54,772

CommitmentsB Estimated amount of contracts remaining to be executed

on capital account and not provided for - -

27 Micro enterprises and small enterprises under the Micro, Small and Medicum Enterprises Development Act, 2006 have been determinedbased on the confirmation received in response to intimation in this regard sent by the Company to the suppliers. No interest in termsof Section 16 of Micro, Small and Medium Enterprise Development Act, 2006 or otherwise has either been paid or payable or accruedand remaining unpaid as at 31st March 2018.

42

Annual Report 2017-201828 RELATED PARTY DISCLOSURES

1 List of Related PartiesRelationships :(a) Associates Cera Sanitaryware Ltd

Gujarat Soaps Pvt Ltd(b) Key Management Personnel Thomas Koshy, Tarun Panchal, Dipshika Khatri(c) Employee Benefit Plans Madhusudan Provident Fund Trust

Madhusudan Gratuity TrustNote : Related party relationship is as identified by the Company and relied upon by the Auditors

2 Particulars of transactions during the year with related parties

Nature of Transactions Associates Key Employee Total(Excluding Reimbursement) Management Benefit

Personnel PlansRs. Rs. Rs. Rs.

IncomeRent 9,790,056 - - 9,790,056

(9,505,626) (-) (-) (9,505,626)Service Charges 747,000 - - 747,000

(711,990) (-) (-) (711,990)Other Services 750,366 - - 750,366

(715,080) (-) (-) (715,080)Dividend Received 216,780 - - 216,780

(162,585) (-) (-) (162,585)Expenses

Director Sitting Fees - 46,000 - 46,000(-) (38,000) (-) (38,000)

Remuneration - 2,730,141 - 2,730,141(-) (2,380,109) (-) (2,380,109)

Contribution to Fund - - 189,018 189,018(-) (-) (194,544) (194,544)

FinanceLoans / Advance Given 31,800 - - 31,800

(22,100) (-) (-) (22,100)Fixed Deposit / Loan Received - - - -

(-) (-) (-) (-)Rent Deposit Received - - - -

(145,300) (-) (-) (145,300)Balance at the end of the year

Receivables 478,165 - - 478,165(446,365) (-) (-) (446,365)

Payables 2,091,300 - - 2,091,300(2,091,300) (-) (-) (2,091,300)

3 Details of material transactions entered into with Related Parties duirng the year

Particulars Nature of 2017-18 2016-17Relationship Rs. Rs.

Rent Received Cera Sanitaryware Limited Associates 9,790,056 9,505,626Service Charges Cera Sanitaryware Limited Associates 747,000 711,990Other Services Cera Sanitaryware Limited Associates 750,366 715,080Dividend Received Cera Sanitaryware Limited Associates 216,780 162,585Loans / Advance Given Gujarat Soaps Pvt. Ltd. Associates 31,800 22,100Rent Deposit Received Cera Sanitaryware Limited Associates - 145,300

43


29 EMPLOYEE BENEFITS

As per Ind AS 19 “Employee Benefits”, the disclosure of employee benefits as defined in the Indian Accounting Standard are given below:

a Defined Contribution Plan

Contribution to Defined Contribution Plan, recognised as expenses for the year is as under :

Particulars 2017-2018 2016-2017Rs. Rs.

Employer’s Contribution to Provident Fund 254,491 234,048

b Defined Benefit Plan

General Description of defined benefit plan

Gratuity

The company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days / one month salarylast drawn for each completed year of service depending on the date of joining. The same is payable on termination of service,retirement or death, whichever is earlier. The benefit vests after five years of continuous service.

The Company has a defined benefit gratuity plan (funded). The Company defined benefit gratuity plan is a final salary plan foremployees, which requires contributions to be made to a seperately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years ofservice is entitled to specific benefit. The level of benefits provided depends on the member’s lenghth of service and salary atretirement age. The fund has the form of an approval gratuity trust and it is governed by the Board of Trustees, which consists ofan equal number of employer and employee representatives. The Board of Trustees is responsible for the administration of theplan assets and for the definition of the investment strategy.

Leave Encashment

The Company has a policy on leave encashment which is applicable to its employees. The expected cost of accumulating leaveencashement is determined by acturial valuation performed by an independent actuary at each Balance Sheet date using projectedUnit credit method on the additional amount expected to be paid as a result of the unused entitlement that has accumulated at theBalance Sheet date.

Risk associated to the Plan (Gratuity and Leave Encashment)

A Acturial Risk Risk due to adverse growth / variability in mortality and withdrawal rates

Longevity Risk

Investment Risk Risk due to significant changes in discounting rate during the inter-valuation period.

Liquidity Risk Risk on account of Employees resign / retire from the company and as results strain on the cashflowarises.

Market Risk Risks related to changes and fluctuation of the financial markets and assumption

Interest Risk Depends on the yields on the corporate / government bonds and hence the valuation of liability isexposed to fluctuations in the yield as at the valuation date.

Legislative Risk Risks of increase in the plan liablities or reduction in plan assets due to change in legislation.

Key Assumptions considered (Gratuity and Leave Encashment)

Acturial Assumptions Discount Rate

Salary Growth Rate

Rate of Interest on Plan Assets

Mortality

Withdrawal Rate

Financial Assumptions Discount Rate

Salary Growth Rate

Demographic Assumptions Withdrawal Rate

Mortality Rate

44

Annual Report 2017-2018Reconciliation of opening and closing balances of Defined Benefit Obligations

Particulars 2017-18 2016-17

Gratuity Leave Gratuity LeaveFunded Encashment Funded Encashment

Plan Non-funded Plan Non-fundedPlan Plan

Rs. Rs. Rs. Rs.

Change in the present value of theDefined Benefits Obligation

Defined Benefits Obligation at the beginning of the year 2,741,043 420,169 2,315,913 317,797Current service cost 91,997 18,921 95,878 19,388Interest cost 219,283 33,613 173,693 23,835Acturial losses / (gain) recognised in OtherComprehensive IncomeDue to Change in demographic assumption - - - -Due to Change in financial assumption (33,264) (5,192) 24,887 4,533Due to Experience adjustments 138,684 24,916 130,672 54,616Benefits Paid (249,923) - - -Prior year Charge - - - -Defined Benefits Obligation at year end 2,907,820 492,427 2,741,043 420,169

Change in Fair Value of Plan AssetsFair Value of Plan Assets at beginning of the year 2,761,405 - 2,317,774 -Expenses Deducted from the Fund - - - -Expected return on plan assets 220,912 - 173,833 -Experience gain / loss on plan assets - - - -Return of Plan Assets recognised inOther Comprehensive Income - - - -Acturial Gain / (Loss) (29,775) - 4,026 -Employer Contribution 13,154 - 265,772 -Benefits paid (249,923) - - -Fair Value of Plan Assets at year end 2,715,773 - 2,761,405 -Actual return on Plan Assets 191,137 - 177,859 -

Changes in Fair Value of Assets and ObligationsFair value of Plan Assets 2,715,773 - 2,761,405 -Present Value of Obligation 2,907,820 492,427 2,741,043 420,169Deficit / (Surplus) amount of Plan recognised on Balance Sheet 192,047 492,427 (20,362) 420,169

Expenses recognised during the yearCurrent Service Cost 91,997 18,921 95,878 19,388Interest Cost 219,283 33,613 173,693 23,835Expected return on plan assets (220,912) - (173,833) -Expenses deducted from the fund - - - -Prior Year Changes / Net Value of Plan Assets - - - -Net Cost 90,368 52,534 95,738 43,223

Assets / Investment DetailsGovernment of India Securities - - - -High Quality Corporate Bonds - - - -Equity Shares of listed Companies - - - -Property - - - -Insurance Company 100% - 100% -

Principal Acturial Assumption

Mortality Table IALM 2006-08 IALM 2006-08 IALM 2006-08 IALM 2006-08Ultimate Ultimate Ultimate Ultimate

Discount Rate (p.a.) 8.00% 8.00% 7.50% 7.50%Expected rate of return on plan assets (p.a) 8.00% - 7.50% -Annual Increase in Salary Cost 6.00% 6.00% 6.00% 6.00%

45


Sensitivity Analysis

Particulars 2017-18 2016-17

Gratuity Leave Gratuity LeaveFunded Encashment Funded Encashment

Plan Non-funded Plan Non-fundedPlan Plan

Rs. Rs. Rs. Rs.

Rate of increase in Discount Ratea) Increase by 100 base points 2,855,704 481,406 2,685,355 407,366b) Decrese by 100 base points 2,966,521 505,305 2,804,573 435,467Rate of increase in Salary Growth Ratea) Increase by 100 base points 2,967,122 505,437 2,804,855 435,541b) Decrese by 100 base points 2,854,325 481,117 2,684,121 407,089Rate of increase in Withdrawal Ratea) Increase by 100 base points 2,914,256 494,383 2,746,664 422,079b) Decrese by 100 base points 2,900,724 490,215 2,734,639 417,957

The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptionsoccuring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumptionwhile holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used inpreparing the sensitivity analysis did not change compared with the previous year.

Maturity Profile of the Defined Benefit ObligationYear 1 2,104,525 - 2,018,066 -Year 2 25,525 - 13,026 -Year 3 406,421 - 13,026 -Year 4 14,524 - 358,041 -Year 5 14,524 - 6,561 -Year 5 Onwards 468,470 - 431,236 -

Company’s estimate of Contribution expected to be paid during Financial Year 2018-19 is as under :Defined Contribution PlanEmployer’s contribution to Provident Fund 12% of Salary 12% of SalaryDefined Investment PlanGratuity 56,501 - 91,470 -Leave Enchashment - 1597 - 1394

The estimate of rate of escalation in salary considered in acturial valuation, take into account inflation, seniority, promotion andother relevant factors including supply and demand In the employment market. The above information is certified by actuary.The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of planassets held, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management.

30 A FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENTAll assets and liabilities for which fair value is measured or disclosed in the Ind AS financial statements are categorised within thefair value hierarchy, as below, based on the lowest level input that is significant to the fair value measurement as a whole :Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilitiesLevel 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observableLevel 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.The fair value measurement hierarchy of the Company’s assets and liabilities is as below :

Carrying Fair Valuesamount Level 1 Level 2 Level 3

Rs. Rs. Rs. Rs.

As at 31st March 2018Financial assets measured at fair valueNon-current Investments 67,715,140 67,715,140 - -Current Investments 41,155,358 41,155,358 - -As at 31st March 2017Financial assets measured at fair valueNon-current Investments 61,127,763 61,127,763 - -Current Investments 35,219,483 35,219,483 - -As at 1st April 2016Financial assets measured at fair valueNon-current Investments 39,200,989 39,200,989 - -Current Investments 24,217,581 24,217,581 - -

46

Annual Report 2017-2018There has been no transfers between levels during the year.

The fair values of Non-Current Investments and Current Investments are derived from quoted market prices in active markets.

The mangement assessed that the carrying values of trade and other receivables, cash and short term deposits, other assetsand trade and other payables, based in their notional amounts, reasonably approximate their fair values because these instrumentshave short-term maturities and are re-priced frequently.

B FINANCIAL RISK MANAGEMENT

The Company’s activities exposes it to variety of Market risk, Credit risk and liquidity risk. The Company’s focus is to foresee theunpredictability of financial markets and seek to minimise potential adverse effects on its financial performace. The Companyhas constituted a Risk Management Committee, which is responsible for developing and monitoring the Company’s risk managementpolicies. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to setand monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes inthe policy accordingly.

The key risks and mitigating actions are also placed before the Audit Committee of the Company.

I Market Risk

Market risk is that the fair value of future cash flows of a financial instrument will fluctuate because of changes in marketprices. Market risk comprises three types of risks : Interest rate risk, Currency risk and other price risk.

Financial instruments affected by market risk includes investments, trade payables, trade receivables, loans.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of financial instrument will fluctuate because of changein market interest rates. Since the company has no interest bearing borrowings, there is no exposure to changes marketinterest rates.

b) Foreign currency Risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate due to changes inforeign currency rates. Since the company has not undertaken any direct exposure to foreign exchange transactionsthere is no exposure to foreign currency risk.

c) Other Price Risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.Other price risk arises from financial assets such as investments in equity instruments and bonds.

The Company is exposed to price risk arising mainly from investment in equity instruments recognised at FVTPL.

II Credit Risk

Credit risk is the risk that counter party will not meet its obligations under a financial instument or customer contract, leadingto a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables), depositswith banks and Inter Corporate Deposit. The Company’s customer mainly consist of its associate Cera Sanitaryware Limited.The Company has a credit policy, approved by the Management that is designed to ensure that consistent processes are inplace to measure and control credit risk.

The Company has trade relationships only with reputed third parties. The receivable balances are constantly monitored,resulting in an insignificant exposure of the Company to the risk of non-collectible receivables. Credit risk is managed throughcredit approvals, establishing credit limits, obtaining collaterals from the customers in the form of deposits and / or bankgurantees and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in thenormal course of business. The maximum credit exposure associated with financial assets is equal to the carrying amount.

The Company’s historical experience of collecting receivables, supported by the level of default, is that credit risk is lowacross territories and so trade receivables are considered to be single class of financial assets.

An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposureto credit risk at the reporting date is the carrying value of each class of financial assets disclosed in financial statements. Asa practical expedient, the Company follows the policy of providing for debtors which are due for more than 180 days. In caseof cash and cash equivalents, since the amount is in form of demand deposits with bank there is no credit risk perceived.Hence no provision for expected credit loss has been made.

III Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated withfinancial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inabilityto sell a financial asset quickly close to its fair value.

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow is generated from operations.The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet itscurrent requirements. The company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents.Accordingly no liquidity risk is perceived.

C CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributableto the equity share holders of the company. The primary objective of the Company when managing capital is to safeguard itsability to continue as going concern and to maintain an optimal capital structure so as to maximise the shareholder value.

47


The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirementsof the financial covenants. The Company monitors capital using a gearing ratio and is measured by net debt divided by totalcapital plus net debt. The Company’s net debt is equal to trade and other payables less cash and cash equivalents. The Companydid not have any borrowings at any time during the year.

As at 31st March 2018, the Company has only one class of equity shares and has no debt. Consequently to such capital structure,there are no externally imposed capital requirements.

31 FIRST TIME ADOPTION OF IND AS

I Transition to Ind AS

These financial statements, for the year ended 31st March 2018, are the first the Company has prepared in accordance with IndAS. For periods up to and including the year ended 31st March 2017, the Company prepared its financial statements in accordancewith Indian GAAP.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 st March2018, the comparative information presented in these financial statements for the year ended 31st March 2017 and in thepresentation of opening Ind AS balance sheet at 1st April 2016 (the Company’s date of transition). In preparing its opening Ind ASbalance sheet, the Company has adjusted the amount reported previously in financial statements prepared in accordance withthe accounting standards notified under Companies (Accounting Stanards) Rules, 2006 (as amended) and other relevantprovisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS hasthe Company’s financial position and financial performance is set out in the following tables and notes.

II Exemptions from Retrospective Application

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS.The Company has applied the following exemptions :

Deemed Cost for Property, Plant and Equipment (PPE)

Ind As 101 permits first time adopter to continue with the carrying value for all its Property, Plant and Equipments(PPE) andintangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previousGAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure all of itsPPE and intangible assets at their previous GAAP carrying values.

III Exceptions from full retrospective application :

a) Estimates

On assessment of estimates made under the previous GAAP financial statements, the Company has concluded that thereis no necessity to revise the estimates under Ind AS, as there is no objective evidence of an error in those estimates.However, estimates that were required under Ind AS but not required under previous GAAP are made by the Company forthe relevant reporting dates reflecting conditions existing as at that date.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required underIGAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening IndAS Balance Sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirements. Key estimates considered in preparationof the Financial Statements that were not required under the previous GAAP are listed below.

i. Fair valuation of financial instruments carried at FVTPL.

ii. Impairment of financial assets based on the expected credit loss model.

b) Classification and measurement of Financial Assets

The Company has classified and measured the financial assets on the basis of facts and circumstances that exist at the dateof transition to Ind AS.

The remaining mandatory exceptions either do not apply or are not relevant to the Company.

48

Annual Report 2017-2018IV Reconciliation under Ind AS 101

a) Reconciliation of Equity as previously reported under IGAAP to Ind AS.

Paticulars Balance Sheet as at Balance Sheet as at1st April 2016 31st March 2017

IGAAP Effect of Ind AS IGAAP Effect of Ind AStransition transitionto Ind AS to Ind AS

Rs. Rs. Rs. Rs. Rs. Rs.

AssetsNon-current AssetsProperty, Plant and Equipment 28,363,339 - 28,363,339 25,018,082 - 25,018,082Financial AssetsInvestments 19,551,548 19,649,441 39,200,989 19,534,275 41,593,488 61,127,763Others Financial Assets 938,813 - 938,813 952,727 - 952,727Deferred tax assets (net) - - - 1,012,299 (1,012,299) -Other non-current assets 3,074,778 - 3,074,778 3,074,778 - 3,074,778

Current AssetsFinancial AssetsInvestments 23,381,310 836,271 24,217,581 31,696,592 3,522,891 35,219,483Trade receivables 10,970,912 - 10,970,912 4,596,909 - 4,596,909Cash and cash equivalents 8,636,088 - 8,636,088 1,035,079 - 1,035,079Bank balances other than above 21,154,480 - 21,154,480 32,605,180 - 32,605,180Loans 16,785,865 - 16,785,865 17,715,871 - 17,715,871Current Tax Assets (Net) 4,332,107 - 4,332,107 1,638,610 - 1,638,610Other current assets 2,470,243 - 2,470,243 3,040,730 - 3,040,730

Total Assets 139,659,483 20,485,712 160,145,195 141,921,132 44,104,080 186,025,212

Equity and LiabilitiesEquityShare Capital 26,875,000 - 26,875,000 26,875,000 - 26,875,000Other Equity 106,303,573 18,852,900 125,156,473 110,912,123 35,164,354 146,076,477

Total Equity 133,178,573 18,852,900 152,031,473 137,787,123 35,164,354 172,951,477

LiabilitiesNon-current LiabilitiesFinancial liabilitiesOther financial liabilities 1,946,000 - 1,946,000 2,091,300 - 2,091,300Provisions 106,848 - 106,848 117,101 - 117,101

Deferred Tax Liabilities (Net) 1,016,862 1,632,812 2,649,674 - 8,939,726 8,939,726

Current LiabilitiesOther Current Liabilities 261,865 - 261,865 57,909 - 57,909Provisions 3,149,335 - 3,149,335 1,867,699 - 1,867,699

Total Equity and Liabilities 139,659,483 20,485,712 160,145,195 141,921,132 44,104,080 186,025,212

49


b) Reconciliation Statement of Profit and Loss as previously reported under IGAAP to Ind AS

Paticulars Profit & Loss for the year 31st March 2017

IGAAP Effect of Ind AStransition to

Ind ASRs. Rs. Rs.

IncomeRevenue from Operations 10,614,762 - 10,614,762Other Income 6,303,869 25,544,882 31,848,751

Total Revenue 16,918,631 25,544,882 42,463,513

ExpensesEmployee benefits expense 4,267,456 (210,682) 4,056,774Finance Costs - - -Depreciation and amortisation expense 1,852,248 - 1,852,248Other expenses 7,869,538 914,215 8,783,753

Total Expenses 13,989,242 703,533 14,692,775

Profit before Tax 2,929,389 24,841,349 27,770,738

Tax ExepnsesCurrent Tax 350,000 - 350000.00Deferred Tax (2,029,161) 8,373,464 6344303.00

Total Tax Expenses (1,679,161) 8,373,464 6,694,303

Profit for the year 4,608,550 16,467,885 21,076,435Other Comprehensive Income / (Expense) not to bereclassified to Profit / Loss in subsequent Peirod - (210,682) (210,682)Re-measurement gains / (losses) on defined benefit plansLess : Income tax effect - 54,251 54,251

- (156,431) (156,431)

Total Comprehensive Income 4,608,550 16,311,454 20,920,004

c) The transition from Previous GAAP to Ind AS did not have a material impact on statement of cash flows.

The Indian GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purpose of this note.

Notes : Explanation for Reconciliation of Equity as previously reported under IGAAP to Ind AS

A Non-Current Investments

In the financial statements prepared under Previous GAAP, Non-current Investments of the Company were measuredat cost less provision for diminution (other than temporary). Under Ind AS, the Company has recognised such investmentsas follows :

Government Securities - At amortised costDebt oriented Mutual Funds - At fair value through Pofit and Loss (FVTPL)Debenture and Bonds - At fair value through Profit and Loss (FVTPL)Quoted Equity Shares - At fair value through Profit and Loss (FVTPL)Unquoted Equity Shares - At fair value through Profit and Loss (FVTPL)

Ind As requires the above investments to be recognised at fair value.

On the date of transition to Ind AS, the difference between the fair value of Non-Current Investments as per Ind AS andtheir corresponding carrying amount as per financial statements prepared under Previous GAAP, has resulted in anincrease in the carrying amount of these invesments by Rs. 196.49 lakh which has been recognised directly in retainedearnings (Equity). Deferred tax liability (net) has been recognised on which fair valuation gain.

As at 31st march 2017, the difference between the fair value of Non-Currrent Investments as per Ind AS and theircorresponding carrying amount as per financial statements prepared under Previous GAAP, has resulted in an increasein the carrying amount of these investments by Rs. 219.44 lakh.

On such fair valuation, net gain amounting to Rs. 228.58 lakh has been recognised in other income in the Statement ofProfit and Loss. Correspondingly, deferred tax expenses has been recognised in the Statement of Profit and Loss.

The above transition has resulted in increase in equity by Rs. 196.49 lakh as at date of transition to Ind AS and by Rs.219.44 lakh as at 31st March 2017.

B Current Investments

In the financial statements prepared under Previous GAAP, Current Investments of the Company were measured atlower of cost or fair value.

50

Annual Report 2017-2018Under Ind AS, these investments have been classified as FVTPL on the date of transition. The fair value changes arerecognised on the Statement of Profit and Loss.

On the date of transition to Ind AS, the difference between the fair value of Current Investments as per Ind AS and theircorresponding carrying amount as per financial statements prepared under Previous GAAP, has resulted in an increasein the carrying amount of these invesments by Rs. 8.38 lakh which has been recognised directly in retained earnings(Equity). Deferred tax liability (net) has been recognised on wich fair valuation gain.

As at 31st March 2017, the difference between the fair value of Non-Currrent Investments as per Ind AS and theircorresponding carrying amount as per financial statements prepared under Previous GAAP, has resulted in an increasein the carrying amount of these investments by Rs. 26.87 lakh.

On such fair valuation, net gain amounting to Rs. 24.11 lakh has been recognised in other income in the Statement ofProfit and Loss. Correspondingly, deferred tax exepnses has been recognised in the Statement of Profit and Loss.

The above transition has resulted in increase in equity by Rs. 8.36 lakh as at date of transition to Ind AS and by Rs. 26.87lakh as at 31st March 2017.

C Remeasurement benefit of defined benefit plans

In the financial statements prepared under Previous GAAP, remeasurement benefit of defined plans (gratuity and leaveencashment), arising primarily due to change in acturial assumptions was recognised as employee benefit expense inthe Statement of Profit and Loss. Under Ind AS, such remeasurement benefits relating to as per defined benefit plans isrecognised in OCI as per the requirements of Ind AS 19 - Employee benefits. Consequently, the related tax effect of thesame has also been recognised in OCI.

For the year ended 31st March 2017, remeasurement of gratuity / leave encashment resulted in a net deficit of Rs. 2.11lakh which has now been removed from employee benefits expense in the Statement of Profit and Loss and recognisedseparately in OCI. This has resulted in decrease in employee benefits by Rs. 2.11 lakh and loss in OCI by Rs. 2.11 lakhfor the year ended 31st march 2017. Consequently, tax effect of the same is also recognised separately in OCI.

The above changes do not affect Equity as at date of transition to Ind AS and as at 31st March 2017. However, profitbefore tax and profit for the year ended 31st March 2017 is increased by Rs. 2.11 lakh.

D Deferred Tax

In the financial statements prepared under Previous GAAP, deferred tax was accounted as per the income statementapproach which required creation of deferred tax asset / liability on temporary differences between taxable profit andaccounting profit. Under Ind AS, deferred tax is accounted as per the Balance Sheet approach which requires creationof deferred tax asset / liability on temporary differences between the carrying amount of an asset / liability in the BalanceSheet and its corresponding tax base.

The application of Ind AS has resulted in recognition of deferred tax on new temporary differences which were notrequired to be recognised under Previous GAAP.

In addition, the above mentioned transitional adjustments relating to current / non-current investments have also led totemporary differences and creation of deferred tax thereon.

The above changes have resulted in creation of deferred tax liabilities (net) amounting to Rs. 16.33 lakh as at date oftransition to Ind AS and Rs. 73.07 lakh as at 31st March 2017

For the year ended 31st march 2017, it has resulted in an increase in deferred tax expense by Rs. 83.73 lakh in theStatement of Profit and Loss and recognition of deferred tax benefit by Rs. 0.54 lakh in OCI.

32 As required under Paragraph (10C) of Ind AS 101, the Company has reclassified items that it recognised in accordance with previousGAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity inaccordance with Ind AS.










Tarun PanchalC.F.O.


Regd. Office : Survey No. 359/B, 359/C, 361 and 362, Rakhial - 382 315 Taluka - Dehgam, Dist. Gandhinagar, Gujarat.Phone : (02716) 267270, E-mail : [email protected]

CIN : L29199GJ1945PLC000443(Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014)

PROXY FORMName of the member(s) :

Registered address :

E-mail Id :

Folio No. / Client Id :

DP Id :

I/We, being a member(s) of shares of Madhusudan Industries Limited, hereby appoint :

1. Name :

Address :

E-mail Id :

Signature , or failing him

2. Name :

Address :

E-mail Id :

Signature , or failing him

3. Name :

Address :

E-mail Id :

Signature

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Annual General Meeting of the Company to be held onTuesday, the 25th September, 2018 at 11.30 a.m. at the registered office of the Company at Survey No. 359/B, 359/C, 361 and 362, Rakhial– 382315, Taluka Dehgam, District Gandhinagar, Gujarat. and at any adjournment thereof in respect of such resolutions as are indicatedbelow:

Madhusudan Industries Limited

Regd. Office : Survey No. 359/B, 359/C, 361 and 362, Rakhial - 382 315 Taluka - Dehgam, Dist. Gandhinagar, Gujarat.Phone : (02716) 267270, E-mail : [email protected]

CIN : L29199GJ1945PLC000443

DP ID Client ID Folio No. No. of shares held

ATTENDANCE SLIPAnnual General Meeting - 2018

at Regd. Office : Survey No. 359/B, 359/C, 361 and 362, Rakhial - 382 315 Taluka - Dehgam, Dist. Gandhinagar, Gujarat.

Name of the attending Member/Proxy (In block letters) :

I hereby record my presence at the Annual General Meeting held at 11.30 a.m. on 25th day of September, 2018.

Member's / Proxy's Signature

Notes : 1. Please bring this attendance slip to the meeting and handover at the entrance duly filled in.2. Members are requested to bring copy of Annual Report with them.


PTO

Resolutions: For Against

1. To consider and adopt Audited Financial Statements, Reports of Board of Directors and Auditors.

2. Re-appointment of Shri Sanwarmal Agarwal as Director, who retires by rotation

3. Re-appointment of Shri Rajesh B. Shah as Independent Director.

4. Re-appointment of Shri Premchand Surana as Independent Director.

5. Re-appointment of Smt. Rutva Acharya as Independent Director.

Signed this day of 2018.

Signature of Shareholder(s)

Signature of Proxy Holder(s)

Note : This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not lessthan 48 hours before the commencement of the Meeting.

Affix

Revenue

Stamp

Survey No. 359/B, 359/C, 361 and 362, Rakhial - 382 315 Taluka - Dehgam, Dist. Gandhinagar, Gujarat.Phone : (02716) 267270, E-mail : [email protected], Website : www.madhusudan-india.comCIN : L29199GJ1945PLC000443


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